Real Estate Taxation in Egypt

Egypt’s real estate market offers many opportunities for investors, but it also comes with specific tax obligations. The Egyptian property tax system includes a modest annual levy (10% of a property’s assessed rental value for residential units) and a one-time transfer tax on sales (about 2.5% of the transaction value). These requirements are spelled out in Law No. 196 of 2008 (with later amendments) and are administered by the Real Estate Taxation Authority (RETA). In practice, the real estate tax funds local services and infrastructure in Egypt’s governorates. For example, a home assessed at EGP 100,000 per year (net rent) would owe EGP 10,000 annually (10% of rent), while a sale of that home at EGP 2,000,000 would trigger a one-time tax around EGP 50,000 (2.5% of the higher official or agreed price).

Governing Laws and Authorities

Egypt’s real estate tax regime is governed primarily by Law No. 196 of 2008 (the Real Estate Tax Law) and its amendments. This law – along with related provisions in the Income Tax Law – sets out who must pay tax, how tax is calculated, and what properties are exempt. Under the law, any person or entity that owns, uses, or exploits property in Egypt is liable for the tax. In other words, once you have a legal title or usufruct over a building, the tax follows. The Real Estate Taxation Authority (RETA), part of the Ministry of Finance, administers these rules. RETA establishes official rental values for properties (based on location, size, quality, etc.) and collects the taxes. RETA also publishes the assessed rental values in the official gazette and handles tax declarations. Notably, real estate tax is due every January 1, with the annual liability payable in two equal installments by June 30 and December 31. (Taxpayers may also pay the full year’s tax at the first installment deadline.)

Types of Real Estate Taxes in Egypt

Egypt imposes two main real estate taxes: the annual property tax on existing buildings and the one-time transfer (stamp) tax on ownership changes. In addition, landlords and sellers may face income or corporate tax on rental income or profits, but these are general taxes, not unique to property ownership.

Annual Property Tax (Real Estate Tax)

This is a recurring tax on owners of built real estate. It is directly based on the property’s rental value. By law, real estate tax equals 10% of the net annual rental value of the property. Practically, Egyptian law allows a deduction for maintenance and expenses: for residential buildings a flat 30% is assumed, and for non-residential buildings 32%. Thus a house’s taxable base is 70% of its rental value. For example, if RETA assesses an apartment at an annual rent of EGP 100,000, the tax base is EGP 70,000 (after the 30% deduction) and the tax is 10% of that, or EGP 7,000 per year. The owner (or usufructuary) is responsible for paying this tax. If the property is rented, tenants share liability only up to their rent.

Payment schedule: The annual property tax is paid in two installments – the first due by June 30 and the second by December 31 each year Taxpayers may also pay the full amount in June if they prefer. Failure to pay on time incurs interest and penalties under the law.

Stamp Duty (Real Estate Transaction Tax)

Every time real estate changes hands, Egypt levies a one-time transfer tax on the transaction. Under Article 3 of Law 196/2008, a 2.5% tax is imposed on the sale, gift, or inheritance of any built property. The tax is calculated on the higher of the official government valuation or the actual sale price. By law, the seller is primarily responsible for paying this 2.5% tax; buyers typically pay the notary registration fees (see below). Importantly, modern amendments have increased first-time buyer exemptions and enforcement: for example, as of 2023 the first-time exemption was raised to properties up to EGP 3 million (under 200 sqm).

Exemptions: Several transactions are exempt from the 2.5% tax. These include transfers between immediate family members (spouses, parents, children) by gift or inheritance, and the purchase of a first home below the threshold (now up to EGP 3,000,000). Charitable organizations, government bodies, and religious institutions acquiring property for non-commercial use are also exempt. Conversely, commercial properties generally do not qualify for exemptions (unless covered by temporary incentives, see below).

Other costs: In addition to stamp duty, buyers pay notary registration fees (typically 1–3% of the property value, often about 2%). These cover the cost of recording the deed at the Real Estate Publicity Office. The transfer tax and registration fees together are the main transaction costs.

Calculation example: For instance, if a property officially sells for EGP 5,000,000 (and this is higher than the government’s valuation), the tax due is 2.5% of EGP 5,000,000 = EGP 125,000. The buyer would also pay about 2% (EGP 100,000) as a notary fee. All payments must be made electronically, and proof of payment is required to finalize the sale.

Capital Gains Tax on Property Sales

Egypt does not levy a separate capital gains tax on individual property sales beyond the above transfer tax. In effect, the 2.5% disposal tax is the only tax on a sale. As one official source notes, “capital gains tax on property sales is currently 2.5%, payable by the seller”. In practice, this simply means the seller pays the 2.5% stamp duty and no additional “profit tax.” (Of course, if a company sells property, any profit is treated as corporate income; but for private sellers there is no extra CGT on property.)

Residents vs. non-residents: The 2.5% transfer tax applies equally to all sellers, whether Egyptian or foreign. Egypt’s tax code does not give foreign sellers a different rate on property deals. In fact, by law the seller must pay this tax, and there is no legal carve-out for non-residents. Likewise, owning property triggers the same annual tax regardless of nationality. That means a foreign owner of a Cairo apartment owes the 10% real estate tax and any disposal tax just like an Egyptian owner. (Egypt does not impose income tax on foreigners’ foreign-source income, but Egyptian-source income – e.g. Egyptian rental income – is taxed as usual.)

Tax Exemptions and Incentives

Egyptian law provides several exemptions and incentives to ease the tax burden on certain real estate or encourage investment:

• Residential thresholds: Private homes used as the owner’s main residence receive relief. For example, a home with annual rental value below EGP 24,000 is fully exempt. Additionally, the first personal residence (by value) may be exempt if its total market value is under EGP 2 million. (Any second residence is taxable in full.)

• Public-benefit properties: Buildings used for schools, universities, hospitals, clinics, mosques, churches, and other public or charitable purposes are exempt. State-owned or used properties (until sold to private hands) are also tax-free.

• Low-income owners: special rules for small units and vulnerable owners (e.g. disabled persons or low-pension individuals). These give extra exemption on very small or economically challenged cases.

• Commercial units: Small shops or offices with net rent under EGP 1,200 per year are tax-exempt. (Larger or higher-income units are taxed on the excess.)

• Government and armed forces: Certain real estate owned by foreign governments (on a reciprocity basis) or by the Egyptian armed forces can be exempt. (In practice, these are special cases.)

• Destruction or vacancy: If a taxable building is demolished or damaged so it cannot be used, the tax liability is removed while the damage lasts. Similarly, unused land independent of buildings incurs no tax until developed.

• Incentives: Egypt can grant temporary tax cuts to stimulate investment. For example, in 2024 a 50% discount on the 2.5% transaction tax was offered for one year on certain industrial/commercial property transfers. Cabinet decisions may exempt entire sectors’ real estate from the annual tax for set periods (subject to official rules). These incentive programs can significantly reduce tax costs for qualifying projects.

Taxation of Foreign Property Owners

Foreign investors are welcome to buy Egyptian real estate (subject to ownership limits) and then must comply with the same tax rules as locals. There is no special tax exemption for being a foreigner. Under Law 196/2008, “the person charged with paying the tax is the natural or juristic person who has the right of owning the property, or who has the right of exploiting it”. This definition is nationality-neutral – if you hold title to a building, you owe the tax. In practice, a foreign national who purchases property in Egypt will pay the 10% annual tax on its rental value and the 2.5% transfer tax when selling.

Foreign owners should also be aware of broader tax obligations. For instance, any rental income from Egyptian property (even earned by a foreigner) is subject to Egypt’s personal income tax rates. However, Egypt does not tax foreign-source income of non-residents, so income generated abroad by the foreign owner is not taxed in Egypt. In terms of repatriating profits, Egypt allows the transfer of foreign investment returns out of the country under Central Bank regulations, so selling a property and taking the money abroad is generally permitted (with proper documentation).

It’s common for a foreign buyer to receive the keys through an agent after closing. However, once ownership changes, Egyptian tax rules kick in. Foreign property owners must register for a local tax ID and file annual declarations with RETA. As Lexology notes, “Property tax is imposed on the individual or entity registered as the legal owner”. In short, if you are listed on the deed (or have legal usufruct rights) you must pay.

Dispute Resolution in Real Estate Tax Matters

Taxpayers have avenues to contest real estate tax assessments. For example, if you disagree with RETA’s rental-value assessment (and hence your tax bill), you can appeal administratively. Under the law, an owner has 60 days from the date of notification to file an appeal against the rental value determination. The appeal is lodged with the local RETA office and requires a small deposit (currently EGP 50), which is refunded if the appeal is successful. The case is then heard by a review committee: this committee is chaired by an experienced (often former) RETA engineer, includes one member from the tax office, and an independent construction expert chosen by professional.

If the administrative appeal is denied, the taxpayer can further appeal to higher bodies, ultimately reaching the Administrative Court (Egypt’s Council of State). Recent RETA news also indicates that taxpayers can now file disputes online through the RETA portal (within statutory deadlines). In any event, it is crucial to track deadlines (often tied to RETA’s official gazette publication) and to compile evidence (such as recent purchase contracts or valuations) when contesting a tax.

Frequently Asked Questions

How is property tax calculated in Egypt?

 Egyptian property tax is a percentage of the property’s official rental value. By law, the rate is 10% of net rent. For residential homes, a 30% maintenance allowance applies first. In effect, the annual tax equals 10% of (rental value × 70%) for houses. (For non-residential buildings, a 32% allowance is used.) RETA’s survey committees determine the annual rent based on location, size, and age. For example, if an apartment’s rental value is fixed at EGP 120,000/year, the taxpayer pays 10% × (120,000 − 30%) = 10% × 84,000 = EGP 8,400 in tax each year.

What properties are exempt from real estate tax in Egypt?

 The law provides many exemptions. Broadly, government and public-benefit properties pay no tax. This includes state-owned schools, universities, hospitals, charitable institutions, and houses of worship. Private residences get relief if they are small or low-value: for instance, a taxpayer’s principal home with net rent under EGP 24,000 (or market value under EGP 2,000,000) is exempt. Small business units (shops, offices, etc.) with net rent under EGP 1,200 are also exempt. Additionally, vacant land not used and buildings demolished/unusable incur no tax. Exemptions also cover foreign government property (by reciprocity), certain military-owned housing, and properties seized for public benefit. In short, modest homes and public-service buildings are shielded from tax, while larger or commercial properties are not.

Do foreigners have to pay property taxes in Egypt?

 Yes. Any owner of Egyptian real estate must pay the taxes, regardless of nationality. There is no blanket exemption for foreign nationals. If you buy property in Egypt, you become the “taxpayer” by law. So a foreigner who owns a Cairo flat must file the annual tax return and pay the annual 10% tax on its assessed rent. Likewise, if the foreigner later sells the flat, they must pay the 2.5% transfer tax on the sale (just like any Egyptian seller). Foreign governments and diplomats may have special rules, but private investors from abroad follow the normal tax rules.

Is there a capital gains tax on real estate sales in Egypt?

 Not in the usual sense. Egypt does not impose a separate capital gains tax on property sales for individuals. The only levy on a sale is the one-time 2.5% transfer tax discussed above. In other words, sellers pay the 2.5% stamp duty and no additional profit tax. (If a company sells property, any profit becomes part of its taxable income, but individuals owe no extra CGT.) Thus, as one official guide explains, “Capital gains tax on property sales is currently 2.5%, payable by the seller” – meaning the stamp tax is effectively the only tax on the sale.

How often do you pay property tax in Egypt?

 Real estate tax is due annually. Once a property is registered, the owner must pay the tax each year. Payment is split into two installments: the first by June 30 and the second by December 31. (You may also opt to pay the full year’s tax with the first installment.) Essentially, the tax functions like an annual land or house tax in other countries. Owners should receive a tax notice from RETA; however, even if no notice arrives, the law requires payment on schedule.

How can I pay real estate taxes online in Egypt?

 Egypt has moved toward e-filing for these taxes. For the transfer (stamp) tax, payment must be made electronically through the Egyptian Tax Authority’s online portal. Cash is no longer accepted; the system guarantees the tax is recorded and helps prevent delays. Once paid, the receipt is presented at the Notary Public to complete the sale. For the annual property tax, RETA now offers online services: property owners can file their tax returns and pay via the RETA e-services website. (Alternative payment channels – banks or in-person at RETA offices – remain available, but online payment is encouraged for convenience.) In summary, both main real estate taxes in Egypt can be paid online through the official portals, streamlining the process for taxpayers