The Real Estate Tax is not a new tax
The Real Estate Tax is an old tax which was firstly imposed in 1954 under the law 56, and lasted until the current new law. Before, taxes were paid as 'returning', where the government took 10% taxes for non residential units and 10 – 40 % taxes from residential units.
Problems with the old law
The old law witnessed several problems that encouraged the government to seek a better one. Some of these problems are as the following:
The law required the outskirts of certain areas to pay taxes while others not, which created injustice and discrimination between citizens in terms of rights and commitments.
In additions to legislation interventions that interfered with the law. The legislation allowed exemption to some real state and not for other older ones, which was unfair and illogic.
The difference
The old law allowed a range of 10 – 40 % of taxes to be paid, and 20% reduction on maintenance. While the new law fixed the amount of taxes to 10 % allowing reduction of 30% to residential and 32% for non residential units.
The amount of tax is fixed to a five year term, where the taxes should be paid every January. Two installments are maid for people who are unable to pay. One at the end of July and the second by the end of December. The tax is subjected to increase or decrease after each term.
Payers
The one responsible for the tax performance is the owner of the building. As for apartment payers the owner of the residence should pay the tax and not the tenant according to the law.
Multiple buildings owner
A person who owns more than one unit will pay the tax of each unit separately and will have separate discounts deductions.
Further more, if a family house constitutes of more than one apartment, and then each apartment will be charged separately.
Old system of rent
The old system of rent will not face any problems regarding the new law, since they already pay small amounts of renting. Thus they are exempted from the new canon.
Unregistered properties
The people who did not register their property will not be pay old taxes, but will start paying starting from the registered year. This will encourage unregistered units to be recorded.
One step towards proparity
31st of March was the deadline for submitting real estate tax decleration, where 12 million forums were successfully proposed. However, the taxes are heavy for the poor people. According to Egypt's Minister of Finance Youssef Boutros-Ghali, 82 percent of Egyptians live on property estimated to be worth less than LE200,000; ten percent live on property worth between LE200,000 and LE400,000; while five percent live on property worth LE500,000 or more.
"The first two categories will be exempt from any fine if a declaration is not submitted," added Ghali.
