Immediate instructions facilitating procedures of determining the family’s private house, in order to be granted law exemption

Additional housing units shall subject to tax price of 10%, with a deduction of 30% for maintenance costs

A guiding table identifying taxes imposed on private and additional housing units

Continuity of exemption of old real state which subject to the laws determining the rental relationship between owner and lessee

Real Estate Taxation Authority (RTA) served the number of 2.7 Million notifications to the owners of real estate housing units to initiate enforcement of the new real state tax law.

Minister of Finance, Hany Kadry Dimian, confirmed that these notifications that served to citizens may involve main residential houses for their families who are entitled to be exempted as a family private house till the value of 2 Million EGP as provided in the new real estate tax law. He mentioned that the owners of those houses shall submit to real estate offices to which their houses affiliate, a declaration noting that this house is a private house for their families, requesting the exemption stated by the law, and canceling the tax assessment.

He said that he issued immediate instructions for Real Estate Taxation Authority (RTA) to inform citizens with the requested procedures and also their rights of appeal the payable real estate amount, if needed.

The Minister clarified that mechanisms of applying the new real estate tax law do not include any ambiguity, a person who owns a housing unit and uses it as a private house for his/her family shall be exempted till the value of 2 Million EGP. And the person who has more than a housing unit, i.e. the additional units shall subject to tax at the ratio of 10% from rental amount after deduction of 30% against maintenance charges.

With regard to the circulated that the housing units owned by low and middle income classes shall subject to real estate tax, the Minister asserted inaccuracies of the same at all, as the law shall not be imposed on those classes and their housing units shall be completely exempted till the value of 2 Million EGP, as well as their small shops and factories till the value of 100,000 EGP, meaning that nearly the ratio form 75% to 80% of total housing units in Egypt shall be exempted.

The Minister pointed out that old buildings which apply to rules determining the rental value between owner and lessee according to both 136/1981 law and 49/1977 law will remain as they are, exempted or assessed by the previous tax (duties) that amount few pounds, if applicable, unless that old rental relationship shall not be changed subject to any legal procedure, in this case it shall be treated as a family private house or as an additional unit as the case may be.

The Minister said that some people repeat  false information on real estate tax in an attempt to stop law enforcement as previously happened within the past five years, wasting many billion to be added to the State’s Treasury of which are supposed to direct the ratio of 50% to Squatters development and governorates according to law.

Regarding  complaints of some owners of real estate units in villages who received tax notices, the Head of the Real Estate Taxation Authority, Dr. Samia Hussein  explained that some people own a city housing unit in  and another one in a village, therefore the first one in the city shall be considered as a private family house, and shall  be exempted till the value of 2 Million EGP, meanwhile his second house shall be taxable according to law, noting that in such case the tax value shall  be only  10% of the estimated rental value after deducting the maintenance costs, the value of the village real estate unit is actually much less than the value of the real estate unit in cities.

The Head of the Authority reassured to citizens that the directorates have received strict instructions to facilitate and accelerate all the necessary measures to consider appeals and grievances submitted.

As for some people's concerns on being taxed in light of re-evaluation processes, Dr. Samia Hussein also declared that the law stipulates on a maximum limit in re-assessment every five years, so as the annual rental value shall not exceed 30% of last assessment for units used for residential purposes, and 45% of last assessment for units used for non-residential purposes.

The real estate tax advisor to Minister of Finance, Mr. Tarek Farag noted that citizens are entitled to request reconsidering the assessments calculated by the Survey & Assessment Committees for real estate units in cities and villages and they have the right to challenge the same within the time limit specified by law, i.e. 60 days as of notification date, and shall be reviewed within 30 days by impartial appeal committees. Appeal requests shall be summited to the headquarter of the real estate directorate, in which the real estate unit is located, and in case of notifying the taxpayer concerning his residence unit, which is considered the taxpayer's main residence and his family, the directorate shall be notified the same through the form designated for tax exemptions.

 It should be noted that the annual rent of the real estate unit used in determining taxation basis shall be calculated according to objective factors including the Geographical location of the real estate, construction and facilities level, building area and the public facilities such as schools, hospitals and highways, the targeted taxpayers for real estate tax are the owner not the lessee.