Egypt has very few taxes which is one of the strong driving forces behind the high level of foreign investment in the country. In Egypt there is no stamp duty or capital gains tax payable on real estate and, if you are a British resident, you will also avoid inheritance tax on any Egyptian properties that you decide to pass on to your loved ones.
Egypt Tax on rental property
Egyptian tax laws work on a self declaration taxation system where rental income derived from furnished property is classed in the same bracket as general income tax. Egypt tax on income is 70% of the gross rent, the other 30% being allowable deductions as income-generating expenses.
Egypt Property Tax - Property which is valued at under LE 500,000 EGP, as well as property with an annual rental income of less than LE6,000 is tax exempt.
Property valued above that figure will be taxed based on an assessment of its annual rental value and under new legislation there is a stipulated levy of 10% of a property's annual rental value after deducting 30% to 32% as maintenance costs. The balance is taxable at a standard rate of up to 20% rate of personal and corporate income.
Stamp Duty / Capital Gains Tax / Inheritance Tax
In Egypt there is no stamp duty or capital gains tax payable on real estate and, if you are a British resident, you will also avoid inheritance tax on any Egyptian properties that you decide to pass on to your loved ones. Egypt taxes make investing attractive.
Egypt tax from the Sale of Property
In terms of property in Egypt, the sale of land and/or buildings is taxed in the same way and the system is very simple.
Egyptian tax chargeable at 2.5% of money earned from a sale and it must be filed as tax owed by April 1st. For example: an individual or corporation selling a piece of land for LE 100,000 must file a tax return by March 31st stating that LE 2,500 is owed in taxes.
The only exceptions (under Article 42) are income from the sale of inherited land or other real estate is tax which are free, as is any income earned from the sale of land or other real estate you own through a shared capital company, provided you keep your shares in the company for at least five years after the sale. This last provision is designed to prevent the formation of "paper" companies to dodge tax liabilities from the sale of properties.
***Note: Egypt Taxes on the sale of real estate bear no relation to property taxes or real estate registration fees. The Egyptian government is currently debating a reform of property registration fees and is proposing to impose international-standard property taxes.