Egypt began to put things in order in taxation. The law on real estate tax was adopted back in 2013, but only since last year, they began to actively monitor compliance with this law
they bring receipts, demand a certificate of the absence of tax debts when selling real estate, and calculate penalties for debts on paying this tax.
Last summer, we were actively asked: how to find out the amount of property tax in Hurghada? Is it true that now you have to pay huge amounts? is it really only an apartment for which a green contract has already been issued? Or only apartments with an area of more than 50 square meters? Do I need to pay property tax if haven't received a receipt yet? How to find out the tax amount for an apartment in Hurghada? When and where do you need to pay? Let's tell you how things really are. Firsthand information from the Egyptian Property Tax Authority RETA.
Who pays tax on an apartment in Hurghada?
The taxpayer is the owner of the building or the person who has the right to use it. Only tenants do not pay property tax. That is, any owner of an apartment must pay property tax, regardless of the set of documents for the apartment. Do you have a sales contract and/or taukil? So there are tax liabilities.
This tax applies to all properties, whether the house is under construction or not and occupied or not occupied. The tax is also levied on land, including that used for garages and gardens, and on rooftop structures. Property in the new law refers to each residential unit in a building, not the entire building.
As for apartments less than 50 square meters.
Such apartments may be exempt from taxes, but not on the basis of the area of the apartment. Property that is used as a primary residence by the taxpayer and has a net annual rental value of less than LE 24,000 is exempt from taxes. It is still mandatory to file a tax return.
How to calculate the amount of tax for an apartment in Hurghada?
The tax rate for real estate in Egypt is 10% of the annual rental value minus 30% for the technical maintenance of this property. Do not rush to get a calculator and be horrified by the amount of taxes. It does not have to match the amount that you actually receive by renting out your apartment. The net annual rental value is set by a specialists, which includes representatives of the Egyptian Property Taxation Authority, the City Hall and the Council of Taxpayers of the region. They have their own formulas, which take into account the year and quality of construction, the area and type of house, as well as the area of the apartment. In fact, it turns out 500-1000 pounds per year for an apartment.
How then to find out what tax is charged on your real estate?
Come to the RETA branch in Hurghada in person, or wait for the tax officer to bring the receipt to you personally. But at the same time, it is worth remembering that not receiving a tax receipt does not exempt.
Do not agree with the amount of tax?
You have the right to appeal the rental value estimate (tax base). The taxpayer must submit his appeal to the tax office, paying 50 Egyptian pounds. Or go to court.
Deadlines for paying property tax in Hurghada:
Property tax must be paid in full by the end of the year - by December 31st. By a single payment until July 31 or in two equal installments: by July 31 the first installment, by December 31 of the same year - the second. The amount of tax is recalculated only once every five years. And it cannot be increased by more than 30%.
Where should property tax be paid?
The tax must be paid in the same city where the property is located, even if the owner does not reside in that city permanently. What is the way out in a situation if you do not fly to Hurghada so often? The taxpayer may allow another person other than him to go to a RETA branch to pay the tax (he needs to take a copy of your passport and a copy of the sales contract). It is not yet possible to pay property tax using a bank card or bank transfer.
What happens if you do not pay property tax:
The penalty for late payment of taxes is calculated based on the discount rate of the Central Bank of the Arab Republic of Egypt plus 2% of the amount of unpaid tax.
An apartment with real estate tax debt will be extremely difficult to sell, a certificate of no debt is now included in the package of mandatory documents.
You will not be able to get a green contract for a property that has a tax debt.
The law also stipulates administrative measures - the tax authorities have the right to collect debts from the amount of rent that you are paid and to seize property.
Additional penalties apply:
- If you did not file a tax return on time and or submitted incorrect data - from 200 to 2000 pounds,
- Provided false or forged documents to the tax office in order to evade payment of tax - 1000 - 5000 Egyptian pounds.
How the payment of property tax occurs in Hurghada in practice:
If you have already received a receipt, take your passport and this receipt, and go to pay at least half the amount for the year until July 31.
If the receipt has not yet arrived, come to the tax office with your passport and a contract of sale (it contains the address of the property). Your property will find in its database and a receipt will be issued. Or they do not find it, because the RETA has not yet completed the work on the assessment in all areas. Then you have to wait until the receipt is brought or come again in the next six months.
If you bought an apartment before 2017, you have definitely accumulated debt. The best way out now is to close this debt as soon as possible, while the penalties are minimal. The farther, the more fine. It is not necessary to pay off the debt in one payment, you can draw up a tax payment schedule and pay gradually.
After paying the tax, be sure to pick up the receipt, check that your name is indicated.
It must be borne in mind that in the tax office they speak Arabic, understand a little English.
RETA address in Hurghada: El Masaleh Street, Old City Council building.
Do you want to enjoy the sea and the sun in Hurghada instead of the queue and confusion at the tax office in Dahar?
Akar Real Estate can represent your interests in the tax office:
- File a tax return for your property in Hurghada
- Timely and annually pay the tax
- Ensure that all paperwork and receipts are completed correctly