Dear Sir/Madame,
We would like to remind you that the last day of registration of property in the Registry Tax Office is March 31, 2010.
The registration calls for all Egyptian or Non Egyptian property owners in Egypt of buildings residential or commercial, apartment, villa, shop to register their property in the Real Estate Tax Office on or before the given due date.
See guideline below regarding the new Real Estate tax law;
Property (ies) subject to tax
· New built properties residential or commercial
· All kinds of properties that were built and not registered in the Tax Office
· Each unit in a building is subject to tax whether the unit is completed and occupied; completed and not occupied OR even it is not completed but is occupied.
Exemption
· Residential property whose annual rent is 6000 Egyptian pounds and below (Although exempted from paying tax, the concerned citizen must register their property not later than March 31, 2010).
· Property whose market value after assessment is 500 000 Egyptian pounds and below (Although exempted from paying tax, the concerned citizen must register their property not later than March 31, 2010).
· Others
Buildings owned by labor associations & organizations that are registered and specialized for their managing offices.
Educational institutions, hospitals, infirmaries, orphanages and charity associations.
Quarters for political parties and professional organizations.
Enclosed graves and buildings of graveyards.
Buildings for youths & sport centers.
Buildings owned by foreign governmental authorities (such as foreign embassies), provided that the treatment shall be the same.
Building that is used in connection with agriculture
Building that is used for social occasions without allowing a profit.
Allowable Deduction ( used to maintain the property)
· Residential 30%
· Other than residential 32%
The tax is payable next year after evaluation and assessment of the property. The Real Estate Tax Office will notify the concerned citizen in writing or by notice to be published in designated office in the Local Government.
The tax is payable in two installments. First installment is on or before end of June of the succeeding year and second installment is payable on or before end of December of the succeeding year. The tax can also be paid at one time.
Penalty/Surcharge
· Non compliance to new tax law. That is a failure to register their property before March 31, 2010 will result to a penalty ranging from 200 Egyptian up to 2000 Egyptian pounds.
· Failure to pay the tax will result to a surcharge from 1000 up to 5000 egyptian pounds plus 2% interest on every day of delay based on unpaid taxes.
How is the tax calculated?
A. The property will be assessed by the council authorized by the Government. Sixty percent (60%) of the assessment based on market value will serve as the bases in calculating the annual rent value.
B. An allowable deduction of 30% is given for residential property and 32% for non residential.
C. Annual rent is determined by getting 3% of the difference between A & B
D. After annual rent is determined in (C), deduct 6000 Egyptian pounds as exemption for residential property (given in #2).
E. Tax due will be 10% of net of annual rent and exemption (for residential property)
Properties valued at 500,000 Egyptian pounds and up will be subjected to tax therefore property which is less than 500,000 Egyptian pounds is exempted from paying the tax.
Example: A property is appraised at 600 000 Egyptian pounds, How much is tax due for Residential?
For Non Residential?
Calculation:
Residential Non Residential
A. Assessment of the property 600 000 600 000
Capital value 360 000 360 000
B. Less: 30% Allowable deduction for residential property
(used for maintaining the property) (108 000) (115 200)
Tax base 252 000 244 800
C. Annual rent value (3% of tax base) 7 560 7 344
D. Less: Exemption limit (for residential ) ( 6 000 ) __
Net tax base 1 560 7 344
Multiply by 10% x 10% x 10%
Tax due 156 734.4
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8. The Appreciation and Enumeration Council are the authority responsible in evaluating and assessing the property. The council will start evaluate the property next year which means no tax to be paid this year.
Also , the Appreciation and Enumeration Council will make assessment for each property every 5 years. After 5 years is completed, re-assessment on the property will be done. Property will be appraised not exceeding 30% of the first assessment for residential property and 45% of the first assessment for non residential property.
When evaluation is completed for each property and tax due is determined, the Tax Office will inform each owner officially and notify as when and where you can pay the tax.
Should you need assistance in registering your property in the Tax Office, we are offering our services. We will need the following;
1. Copy from the purchase contract. If you have more than one property, we need copy of contract for each property (You can send copies of documents thru our email doris@unitedlawyers-
2. Copy from the passport of the owner or his/her ID (You can send copies of documents thru our email doris@unitedlawyers-
3. Power of Attorney to act accordingly in front of the Egyptian Authority.
Note:
a. For Non Egyptian who are coming to Egypt before the given due date, Power of Attorney can be done here in Egypt
b. For Non Egyptian living outside Egypt and could not come before the given due date we are attaching herewith Power of Attorney form to be filled in and stamped and registered in the Egyptian Consulate in the country of your residence. After you completed the Power of Attorney, to send it to our office address at:
United Lawyers Company
Villa 11014 Village Road Touristic Center
Hurghada Red Sea Egypt
PO Box 422
Make sure we receive the Power of Attorney before March 31, 2010 to enable us to complete the work.
4. The registration to be completed will take 2 working days.
If you have further concern, please do not hesitate to contact us.
United Lawyers Company
Villa 11014 Village Road, Touristic Center
Hurghada Red Sea, Egypt
Tel: 002 (065) 346 2071
Fax: 002 (065) 346 2072
Mob: 002 010 700 55
002 010 113 8400
info@unitedlawyers-
www.unitedlawyers-
