Today the Eygptian government recognizes the great value foreign investors in property have for the success of the economy and have set about actively encouraging overseas buyers to Egypt. New laws have been established to make the Egyptian property purchase procedure more secure. For example, the government can no longer impound or nationalize any property they wish – a practice that stood for centuries. These changes, along with a few others, are increasing confidence amongst overseas buyers.
We will gladly guide your through the purchase process in Egypt to ensure you are fully informed of the facts to avoid any potential pitfalls.
Once you decide on a property, you will need to pay a holding deposit to take the property off the market while contracts are drawn up.
It is completely usual to negotiate a property’s selling price in Egypt, unless you are buying off-plan when the price is fixed.
Lawyers
Lawyers in Egypt will normally speak English and will be able to produce your necessary paperwork in Arabic, as required by all the authorities. Egypt has many complex real estate registration issues so it is critical to have a lawyer conduct the appropriate searches and provide you with legal advice regarding the purchase.
Local lawyers will also help you through the best way to conduct business with the local people who have their own particular idiosyncrasies and customs which are important to be aware of.
Fees and Taxes
Property registration and legal fees for conveyance total around 6%.
Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).
Tax on any form of income from property runs at 20 to 22% and is basically the alternative to Value Added Tax. Many countries enjoy a double taxation treaty with Egypt.
Egypt levies no inheritance or capital gains taxes.
Registration
Most Egyptian properties are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer’s assistance in liaising with the Real Estate Registration Office in Egypt is essential in order to ensure the property is duly registered and prepared for foreign purchase. Registration can take up to four months. After inspections and payment of taxes/fees, you will finally obtain a new title from the Registry.
Mortgages
Currently there are no mortgage facilities available to foreigners in Egypt, though this situation is due to change in the near future with the full implementation of a new mortgage law in Egypt. The best option today is to obtain a mortgage abroad or to free up equity in your country of residence via a re-mortgage or an equity release scheme. In this way you will be able to purchase your property in Egypt outright.
The current lack of a fully developed lending system has slowed the construction industry in Egypt, even though Cairo is one of the most densely populated cities in the world and the need for new housing is starkly apparent. This situation is destined to change as soon as mortgage facilities become more commonplace.
For more info on The Desert Pearl development in Hurghada get in touch at divecentre@gmail.com to arrange floorplans, Pricing & a reservation form.
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