Egyptian Property Tax Dec 2016
In late 2016 we heard rumours of a new Egyptian Property Tax being introduced, details as usual were sketchy and mainly from people posting on Facebook. It appeared some property owners were receiving tax bills and the Chinese Whispers went into overdrive about how the Egyptian Government were going to take properties back from foreigners that hadn’t paid their tax bills. We tried to find out the details while we were in the UK but as with everything to do with Egypt no-one seemed to actually know the exact details of this Egyptian Property Tax so we waited until our trip to Hurghada and spoke face-to-face with people.
We should have known it wasn’t going to be that simple!
We spoke to our lawyer who was already helping some clients with their tax bills, and basically his advice was to appeal the tax bills because they were too high, so what is too high and how do they get to the figure? In the UK or other countries we would have official instructions on how the tax is calculated, why it is being calculated this way and payment details, not in Egypt.
After sitting down with various people involved in the Real Estate industry including developers/lawyers and accountants this is what we came away with and I have to apologise now before you read on, because it doesn’t make any sense to us either!
How is this Egyptian Property Tax calculated?
Someone in the tax office picks a figure they think the property would rent out for, based on m2, location, facilities, so no official calculation.
How much do you have to pay for this Egyptian Property Tax?
From this calculation they work out what the annual rental income would be and you then have to pay a percentage of this which is basically 1 month’s rental, so if the rental income was 10,000le per annum you would pay 833le (approx £42 Dec 2016)
How do you receive the tax bill for this Egyptian Property Tax?
It seems the tax bills are sent to the developers of the projects and they then have to pass them onto the owners
How long do you have to pay the Egyptian Property Tax bill?
There appears to be a 60 day deadline to pay the tax bills. We commented that this was impossible as most foreign owners don’t visit their properties very often and it could be months or even years before they even see the bills. We were told, the 60 days isn’t from issue of the bill, but from when you are given the tax bill so could be months or years when you visit the property??
How do you pay the Egyptian Property Tax bill?
You can pay in person, through your lawyer or accountant, as you will read at the end of this Blog Rivermead Global Ltd are going to try and work something out for our clients like we do for their maintenance fees.
Can you appeal the Egyptian Property Tax bills?
Come on it is Egypt, of course you can appeal (the last time we heard of a property tax coming in, everyone refused to pay it, so it was scrapped), looks like it is going through this time but just for foreigners. The lawyers we have spoken to recommend appealing because they say the bills issues so far have been too high (we think they maybe trying to back date the tax so everyone should just pay the current tax year in our opinion). You can also appeal if you live in your apartment full time and again this can be done through your lawyer.
What is Rivermead Global Ltd doing for their clients
As we have mentioned, this information is still not official but what we managed to find out from face-to-face meetings, and we strongly recommend you contact your lawyer or accountant to make sure you are covered legally. As usual Rivermead Global Ltd are looking at how we can help our clients working alongside Mr Remon Nazih the lawyer most of our clients have used. This is how using recommended services can help, because we can work alongside them to make your life easier and provide exceptional services, we can basically take you out of the equation until we find a solution between us all and then let you know what is happening.
As it is just the Tiba developments that seem to have received any tax bills so far, we are currently compiling a list of all our Tiba clients, so we can pass to the Tiba Management and see if any tax bills have been issued to any of our clients. Once this has been done if any of our clients have been issued a tax bill and they used Mr Remon Nazih as their lawyer we will first speak to the client and inform them of the tax bill an see what they want to do. If they wish to pay it, we will work out a payment method for them, if they want to appeal we will speak to Mr Remon Nazih and inform them of the process/costs etc… We will then set this up to happen annually for all clients on all developments once the bills start to be issued, fingers crossed it gets scrapped again, but until then we will start putting these process in place for our clients.
If you have bought from another agent and need assistance I would say contact them direct and see what they can do for you as this is going to be very time consuming and not something we will be able to do for everyone, just Rivermead Global Ltd clients.
**Note, this is just information we have managed to find out and written to give some insight into this property tax, due to the lack of official information and it is only to be used for information purposes. We are not lawyers or accountants so please seek professional advice from your own lawyer or accountant**