Egypt’s Senate recently approved new amendments to the Real Estate Tax Law, aiming to raise the exemption threshold for owner-occupied residential units.
Law 196/2008 imposes an annual tax on properties, whether residential, commercial, or industrial, calculated according to the net annual rental value after deducting maintenance expenses.
The law also grants exemptions to primary residential units with low rental values, such as villas, palaces, and old buildings inhabited by long-term tenants paying nominal rents, many of whom are now retired and lack the financial means to pay the tax.
Senator Ashraf Abdel-Ghani, secretary of the Senate’s Financial and Economic Affairs Committee, said the current law exempts units valued at no more than LE2 million. The committee deems it necessary to expand the scope to include units valued up to LE8 million or with a rental value of LE100,000, to ensure that primary residences are not subject to the tax.
The proposed amendments are scheduled to be referred to the House of Representatives, the competent legislative authority, to approve the final version of the law and begin its implementation.
Chairman of the Senate’s Committee on Financial, Economic, and Investment Affairs Ahmed Abu Hashima has been quoted as saying that the decision to amend the law was driven by the need to raise the exemption threshold, particularly in the light of the sharp rise in property values in Egypt in recent years.
He added that the exemption would continue to apply only to one property used as the family’s main residence, striking a careful balance between social equity considerations and the principles of fairness.
MP Mohamed Attia Al-Fayoumi said the decision dispels the notion of the government as a “tax collector” and underscores its acting in favour of people’s interests. He noted that housing is a human and legal right enshrined in the 2014 constitution, and that the New Republic places housing as a priority second only to food and clothing.
He affirmed that the measure would not cause a significant shortfall in state revenues but would encourage home ownership and improve living standards. If implemented fairly and transparently, he added, the law could increase state revenues without imposing heavy taxes on low-income groups.
Abdel-Ghani explained that valuations are based on current market values as determined by specialised committees, not on values recorded in old sales contracts. He noted that the law grants citizens the right to appeal against valuations within 60 days of notification, to ensure transparency and fairness.
However, Mohamed Al-Shawadfi, professor of investment and finance at Zagazig University, said a main criticism of the law is that the current system for estimating rental value lacks accuracy and relies on assessment committees whose decisions may not be transparent or fair. He added that evaluation methods are poorly regulated.
Despite the widespread ownership of real estate in Egypt, tax proceeds account for less than one per cent of total tax revenues, even though the real-estate sector represents a significant share of GDP, raising questions about the law’s effectiveness, he said.
He said that there should be a fundamental overhaul of valuation mechanisms, greater transparency in estimating rental values, and the automatic linkage of exemptions to inflation rates to ensure fairness.
He also believes that tax revenues could be improved by updating real-estate registries and valuation systems, rather than merely raising rates or introducing cosmetic amendments. He emphasised that the focus should be on implementation and effective enforcement, as weak execution undermines any real reform.
Yousri Al-Sharqawi, an international investment specialist and head of the Egyptian-African Businessmen’s Association, said the extended exemption represents a cornerstone for achieving social justice.
He explained that the amendment reflects the legislature’s ability to read economic realities and calibrate living conditions for citizens, while maintaining a balance of tax revenues as a key source for the state budget.
Raising the exemption threshold on property taxes, he added, would ease the pressure on Egyptian household budgets.
* A version of this article appears in print in the 29 January, 2026 edition of Al-Ahram Weekly
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