Real Estate and Property Law in Egypt

Real Estate Law

Real Estate and Property Law in Egypt

Registration of Property in Egypt (for Egyptians and Foreigners)

In order to develop the real estate market in Egypt, legislations were amended to secure the interests of foreign investors and protect their rights in accordance with state policy, where any person or foreign investor can buy real estate in Egypt.
Foreign citizens have the opportunity to buy real estate in Egypt under Law No.30 of 1996, which organizes non-Egyptians ownership of built properties and space lands. This law gives Foreigners the right to buy real estate in Egypt on an equal footing with Egyptians, using only a passport.
The General legal rule regarding real estate in Egypt stipulates that property does not transfer neither between contract parties nor third parties unless registration is made through the competent public notary offices which are the only governmental organization that are entrusted with organizing and applying of the rules of non-Egyptians (foreigners) ownership of real estate and space lands in Egypt.
There are special offices for real estate registration, which are responsible for all notarization Affairs and documentation for requests of non-Egyptians (foreigners) for ownership according to provisions of law of foreigner’s ownership No. 230 of 1996.
property shall be recorded at the public notary office for the first time by the buyer then the buyer has the right to sell it under law of foreigner’s ownership after five years from the date of registration, however, a buyer may submit a request to the Prime Minister For exemption from this requirement and the disposition of the property before the end of this period. This is known in Egyptian law as the right of private ownership and how to record transactions at public notary offices.
Companies and enterprises have the right to own lands and properties in order to conduct its operations or Expansion whatever the nationality of the partners or shareholders or their place of residence or their participation rates or their contribution to the capital, and that except for lands and real estate, located in areas that determined by a decision of the Council of Ministers, that this decision sets out the conditions and rules of behavior there, in accordance with Article (12) of Law No. 8 of 1997 on guarantees and incentives Investment.
Egypt have legislations and laws to eliminate crimes of fraud regarding real estate such as Article (336) of the Egyptian penal Code taking into consideration that the punishment is imprisonment for up to 15 years, so it must assured before Contracting to buy a property in Egypt to follow several fundamental steps, including a review of Documents of ownership and title and documents of the buyer to make sure of his legal position, and whether he may act, in selling as a principle or with valid power of attorney and also make sure of the notarization office which issued such Documents.
Ownership shall be notarized at public notary offices and It’s essential to refrain from buying any property in case the seller does not have the legal status for sale or disposition of the property in order not to fall a prey to fraud or misrepresentation, therefore when deciding to buy a property in Egypt please contact the firm for a legal advice And take advantages of our firm services to protect you from real estate fraud.

The laws governing the work of documenting and notarizing of all Types of property contracts (real estate) in Egypt:

Notary Law No. 114 of 1964, as amended.
Law on Documentation No. 68 of 1947, as amended.
Law No. 5 of 1964 on the organization of public notary offices.
Law No. 142 land registry system of 1961.
Law No. 230 of 1996 has organized the ownership of Properties for non-Egyptians.

Importance of notarization of property contracts (Real estate) in Egypt:

Enabling others to Know about the legal status of the real estate.
Protection of Property and Real estate and not to give the seller any opportunity to manipulate or to sell that property more than once.
Encouraging Real estate creditability, as banks do not give loans except to the property owner and the ownership of property does not transfer except through such notarization.

The benefits of investing in real estate in Egypt:

Real estate prices in Egypt are growing every year up to 40%.
A benefit of real estate renting in Egypt is very profitable and profits are up to 20% of value of the property.
Egypt has opened the real estate market to foreigners since 2004, and during this time, houses and apartments and real estate construction standards rose to European levels but still with a very cheap cost.
Low cost of living in Egypt, including utilities, undoubtedly attract permanent residence of European citizens.

conditions for ownership of foreigners of built real estate and space lands:

acquisition of no more than two properties across the country to be used for his own habitation and his family, and without prejudice to the right to own real estate which is necessary for the conduct of private activity licensed from the competent Egyptian authorities.
Each property shall not exceed four thousand square meters.
Property shall not be accorded as prestigious Monument regarding the provisions of the Protection of Monuments Act.

A request may be submitted to the Prime Minister for the exception of the conditions contained into two items 1.2 per his vision accordingly.

The Council of ministers is competent to set conditions and Private rules regarding foreign ownership in touristic areas and urban communities that it determines.

Documents required for registration of property contracts (real estate) in Egypt:

Documents Ownership of the seller registered according to the law of real estate registry.
A power of attorney for buying the property.
A copy of the buyer passport.
Official revealed returns.
A copy of buildings license.
Engineering drawings.
Power of attorney notarized at the competent public notary office (Egyptians) or a power of attorney legalized up to the Egyptian Consulate (for foreigners).

Tax legislation of real estate in Egypt:

First, law No. 196 of 2008 of issuing as amended by Law No. 103 of 2012 and Law No. 117 of 2014:

Article (12) of the Tax law No. 196 of 2008 states that: “tax rate is to 10% of the annual rental value of the buildings that are subjected to the tax, that after excluding 30% of this value as for the places used for housing, and 32% for the places used for purposes other than housing. This is in return of all expenses that are endured by the taxpayer including maintenance expenses”

Under article (18) to (Tax exemption):

Every unit in a building used for inhabitation and its annual rental value is less than 24000 pounds (twenty-four thousand pounds), provided that any other sum that exceeds that amount should submit to the tax, the family in the application of the rule of this item include the taxpayer, spouse and minor children.
Every unit in a building used in commercial, administrative or professional trading purposes and its annual rental value is less than 1,200 pounds (one thousand two hundred pounds) provided that any other sum that exceeds that amount should submit to the tax.

Second, real estate tax acts In Egyptian law:

Article 42 of Law No. 11 of 2013 stipulates on amendments of certain provisions of Income Tax Law promulgated by Law No. (91) Of 2005, as amended, and as amended by Law No. (101) for the year 2012, that Tax at a price of 2.5% shall be imposed on the total value of the disposition in built properties or real estate To build on, and the seller has to pay the tax within thirty days from the date of Disposition, and in the case of the notarization of Dispositions, public notary offices shall collect taxes and supply them to Tax Administration within thirty days from the date of the notarization, unless Taxes have been paid to Tax Administration before that date.