Тах Law

President Mubarak said there are no plans to change the tax which is facing considerable opposition from those that claim it will be too much for a recovering real estate market as it will make owning property more expensive.

Reports so far indicate that the annual tax on property that is worth LE 500,000 will be LE 30, while the annual tax on property that is valued at LE 1 million will be LE 660.

• How they calculate the taxes on your property?

Under the law, The relevant committees working for the Property Tax Office will carry out the evaluation by calculating the market value of the property, and then estimate the value of the property, according to its location and the services provided and available to it.

Deducting 40% from the market value to reach the capital value of the property, and then estimate the value of the annual rent for the property, which is 3% of the capital value.

Excluding 30% of the annual rental value for maintenance expenses, and then exclude from the remainder another six thousand pounds, as this is the limit of annual exemption determined by the law.

The tax will then be calculated by the rate of 10% of the net value of the annual rental rate after excluding maintenance and exemption mentioned above.

Egyptian square meters

When an investor buys the land, it is imposed encumbrance to build on 20-40% of the land, depending on the area. Thus, in the area of 1000 square meters can construct a building area of only 200 meters. The remaining area set aside for green or recreation area. In Egypt, it so happened that this encumbrance has influenced the mentality of local developers, and they, in turn, saddled their customers to 15-20% of the usable area on the service area.Thus, builders are selling flats on the basis of the total number of feet they occupy in the building: including the thickness of the walls, doorways, as well as the support facilities that serve the apartment (mine communication toilets, stairs).

Some of our clients often ask this question:

• Why do we pay for this service area the same price as a living space, for which reason they are equivalent, because they have different purposes?

Or their interests as follows:

• It turns out there is no law, and it is traditionally, by default, condominium, for which we have not given consent?

The fact is that 20-40% of the land permitted for construction, has already cost 5 times more expensive.