Family house, till the value of two million EGP., shall be exempt and introduction of a new exemption of non-residential units till 100 000 EGP.

25% of tax proceeds shall be allocated for developing slum areas, another 25% for municipalities to achieve social justice

Buildings of social associations, political parties’ headquarters, youth centers, professional unions and the armed forces houses shall be exempt

Business organizations shall select their representatives in Committees of Appeal, Survey and Assessment in order to ensure impartiality

 President Abd El Fattah Elsisi has issued a presidential decree amending the Real Estate law No. 196/2008, as such new amendments aim at expanding tax exemptions to include the units owned by the middle-and low income groups, whether they are for residential or non-residential purposes, besides promoting the legal guarantees afforded to taxpayers to ensure the proper enforcement of the law.

  Minister of Finance, Mr. Hany Kadry Dimian stated that the amendments enshrined in the law issued by the president, aim at reassuring the low-income groups and the lower income in the middle class that they will not incur any tax burdens in light of the new real estate law, confirming that the poor and the low-income groups shall not be affected, as the owners of the units are the targeted not the tenants.

Minister of Finance declared that the amendments include a special tax exemption for the units utilized in non-housing purposes, if the net annual rental value is less than 1200 EGP. after excluding maintenance expenses at about 32% of the value determined by the Committees of Appeal, Survey and Assessment, i.e. the non-residential units amounting up to 100 000 EGP. shall be exempt.

  The Minister said that such exemption is to support the owners of small service, commercial and industrial establishments, especially in villages, hamlets and slum areas, as they represent a large segment of the society.

  He also added that the amendments expressly stipulate that the family house shall be exempt provided that its saleable value does not exceed two million EGP. reassuring that  low and middle -income groups shall not be affected. For example: if the residential unit is valued at 4 million EGP., taxes shall be computed based on the additional two million, not on the total value of the unit, and the annual tax value shall be only 2640 EGP., i.e. allocating  660 EGP. for the Fund of Development of Slum Areas  and another 660 EGP. for developing municipalities .

The Minister added that about 25% of the collected real estate tax revenues shall be directed to governorates as an additional source for implementing their projects, while 25% will be dedicated to the Fund of Development of Slum Areas  to address the slum areas problems that need more resources for re-planning and development , in addition to 50% of which shall be dedicated to the state public treasury to be disbursed on developing education ,health and insurance systems as well as establishing development projects in these governorates .

The Minister pointed out that the amendments adopted by the president includes strengthen the legal guarantees for citizens to be able to appeal against tax assessment, in addition to reconstitute tax appeal committees to ensure balance and justice between all parties of the system. The amendments stipulate that, an expert that did not work in the Real Estate Tax Authority, shall be the head of the committee, its members shall include a representative from Real Estate Tax Authority, a consulting engineer nominated by the Syndicate of Engineers, or an experienced appraiser nominated by The Financial Supervisory Authority  or the Central Bank .

Concerning the appeals submitted by owners of the units utilized in industrial, commercial and service activities, a representative of such sectors nominated by the industrial, commercial and tourism federation chambers shall be hired, that was the claim submitted by Business, Industry and Tourism Organizations.

Concerning doubts of increasing the market values of real estate units, The Minister ensured that the law draws the maximum limits for such increase used for determining tax on such units, which shall be reconsidered every 5 years. The maximum increase limit is estimated at 30% of the current total assessment of residential units and 45% for non-residential units.  

He also added that, the law shall exempt the units with the stable legal status that approved by laws No. (49/1977) and (136/1981) concerning organizing the relationship between the owner, the tenant and   laws of renting buildings before issuance such of such laws. The rental value for such exempted units shall be re-assessed after legal termination of the tenancy agreement.

He also said that buildings owned by registered associations and international labor organizations, political parties’ headquarters, professional syndicates, sports and youth centers shall also be exempt. As well as these amendments expressly stipulate that cemeteries shall not be subject to real estate tax not only be exempt. The Armed Forces’ Houses, hospitals, units, and all its buildings shall be exempt.

The Minister confirmed that the law considers the social changes that the citizen or their heirs may face while payment of tax and their ability to do so as the State Public Treasury shall afford the taxes on their behalf.