Property Investment in Egypt

 

For quite some time now, Egypt has struggled to find its feet in the vast global real estate market. This has been largely due to lax governments in the countries recent past that failed to realize the tourism potential of the country, nor did they pay attention to developing the investment friendly infrastructure of the country. But things are changing for the better thanks to the recent government initiatives aimed at attracting maximum tourism exposure for the country.

To this end, peace and political stability are the biggest platform from which the Egyptian government plans to launch an aggressive marketing campaign to lure serious real estate and property investments in the country. Egypt has largely remained unaffected by the influence of Islamic fundamentalism that have caused problems for many of the beautiful Islamic countries throughout the Asian continent and now is enjoying a steady increase in its economic development.

In order to reap maximum benefit from the changed global order, the Egyptian government has chosen the path of development through friendly relations with developed countries, like the USA and the UK. This has resulted in large scale investment queries from several European countries. The Brits particularly like the metropolitan lifestyle of certain cities, like the capital city of Cairo, and the similar culture and traditions due to the country's close proximity to Europe.

Today, investors seek the stability and simplicity of the property market to gain good returns on investment. Under-performing stock markets are often proving more volatile than property and this is especially true for the non-professional as there are many external factors that can effect your financial investment. Did you know that 50% of the members of The Times Rich List made their money through investing in property?

The benefit of buying specifically for investment purposes is the removal of emotion from your purchase while property is used purely as an investment vehicle. Investment property in Egypt offers many possibilities in the form of re-assignable off-plan contract options to sell at a substantial profit prior to completion, or "buy-to-let" situations to generate reliable rental income and eventually substantial capital appreciation.

Main Reasons Why Egypt is a Desirable Investment Location:

• Low property prices starting at around only £30k
• Steady year-on-year capital appreciation of between 20-30%
• Beautiful, well established tourist hotspots suitable for varied tourist interests, from excellent diving and snorkeling to cultural and historical locations
• Stunning natural, unspoilt landscapes
• Steady annual growth in tourist figures
• Less property taxes than paid in the UK
• No capital gains tax
• British residents avoid inheritance tax on any property in Egypt
• Foreign investors are regarded by the government as a big investment opportunity and laws have recently streamlined procedures, making the purchase procedure easy.
• Strong economic growth and increased investment in infrastructure are boosting the property investment market as a whole.
• Warm desert climate with temperatures ranging from 14°C in winter to 30°C in summer creating a year-round tourist season
• Politically stable country
• Increased inward investment, creating a rich investment climate.
• Well renowned developers are creating luxury resorts to cater for Egypt’s new influx of international tourists
• Easy air access from many European destinations makes Egypt an ever popular medium haul holiday location
• Cairo International airport is being modernized and a new terminal is to be built by early 2007
• Low cost of living and maintenance costs
• English is widely spoken, after Arabic

 

Below is a guide to help you understand tax in Egypt :

Capital Gains Tax
In Egypt there is no Capital Gains Tax levied on property.

Inheritance Tax
Inheritance Tax doesn’t exist in Egypt.

Stamp Duty
There is no stamp duty in Egypt.

Tax from the sale of the property

When selling on a property in Egypt the seller must pay a tax of 2.5% on the sales price.

Property Rental Tax

All incomes earned from a property (rental or other) in Egypt must be detailed in a tax return, filed by 31st March each year. The following rates of taxation on rental income apply (per year):

Property registration

Once the sale has been completed and the contracts have been signed, the property must be registered with the local real estate department and the public notary. A fee of 3% of the value of the property is required to be paid on registering the purchase.

Real Estate Tax
There is an annual real estate tax that varies depending on location and standard of property.