Egypt began to put order in taxation.
How long it will take him is questionable, kidding aside, taxes have to be paid.
The real estate tax law was adopted back in 2013, but only since last year did they start actively checking its compliance.
When selling a property, they require confirmation that you have no tax debts.
Frequently asked questions from you:
How to find out the amount of real estate tax in Hurghada?
Is it true that you have to pay huge amounts?
Is it just an apartment for which a green contract has already been issued?
Or only apartments with an area of more than 50 square meters?
Do I have to pay property tax if I haven't received a confirmation yet?
How to find out the amount of tax for an apartment in Hurghada?
When and where do I need to pay?
Let's talk about how things really are. The information is first-hand from the Egyptian Real Estate Tax Authority RETA.
Who is obliged to pay the tax for an apartment in Hurghada?
The taxpayer is the owner of the building or a person who has the right to use the so-called tawqil. (Not only tenants pay property tax). This means that every apartment owner must pay real estate tax, regardless of the document that confirms this ownership. Do you have a purchase contract and/or taukil? So you have tax obligations.
This tax applies to all real estate, whether it is a house under construction or not, occupied or unoccupied. Tax is also levied on land, including that used for garages and gardens, and on roof structures. Real estate in the new law refers to each housing unit in a building, not the entire building.
As for apartments smaller than 50 square meters, these
, may be exempt from taxes, but not based on the area of the apartment. Property used by the taxpayer as their main residence and with a net annual rental value of less than LE 24,000 is exempt from tax. But you still have the obligation to file a tax return.
How to calculate the amount of tax for an apartment in Hurghada?
The property tax rate in Egypt is 10% of the annual rental value minus 30% for the technical maintenance of this property.
Do not rush with the calculator, the amount may not match the one you will actually get by renting an apartment. The net annual rental value is determined by representatives of the Egyptian Real Estate Taxation Authority. They have their own formulas that take into account the year and quality of construction, the area and type of the house, as well as the area of the apartment. In reality this works out to £500-1000 per year per flat.
How then to find out what tax is charged on your property?
Come in person to the RETA office in Hurghada, or wait for the tax official to bring you the receipt in person. At the same time, however, it is necessary to remember that not receiving a tax document does not mean that you do not have to pay.
Do you disagree with the amount of tax?
You have the right to appeal against the assessment of the rental value (tax basis). The taxpayer must file an appeal with the tax office, paying 50 Egyptian pounds. Or go to court.
Deadlines for paying real estate tax in Hurghada:
The property tax must be paid in full by the end of the year - by December 31. With a one-time payment until July 31 or in two equal installments:
first installment by July 31,
until December 31 of the same year - the second.
The tax amount is recalculated only once every five years. And it cannot increase by more than 30%.
Where is the property tax to be paid?
The tax must be paid in the same city where the property is located, even if the owner does not have a permanent residence in that city.
What is the way out of the situation if you don't fly to Hurghada that often?
Come to the RETA branch to the RETA branch (you must take a copy of your passport and a copy of the purchase contract). It is not yet possible to pay property tax by bank card or bank transfer.
What happens if you don't pay property tax:
The penalty for late payment of taxes is calculated based on the discount rate of the Central Bank of the Arab Republic of Egypt plus 2% of the unpaid tax amount.
An apartment with a property tax debt will be extremely difficult to sell, a certificate of debt-free status is now part of the package of mandatory documents. And our real estate office offers this as part of legal services.
You will not get a green contract for a property that has a tax debt.
The law also provides for administrative measures – the tax authorities have the right to collect debts from the amount of rent you receive and seize property.
Additional sanctions may apply:
- If you did not file your tax return on time or provided incorrect information - from 200 to 2000 pounds fine
- Providing false or falsified documents to the tax authority in order to avoid paying tax - 1000 - 5000 Egyptian pounds.
How property tax is paid in Hurghada in practice:
If you have already received a receipt, take your passport and this receipt and go and pay at least half of the amount for the year by July 31.
If you did not receive the receipt, come to the tax office with your passport and the sales contract (contains the address of the property). They will find your property in the database and issue you a confirmation. It is possible that they will not find it because RETA has not yet completed the assessment work in all areas of the city. Then you have to wait for them to bring the receipt or come again in six months.
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