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Real estate taxes stir controversy among property owners, industrialists - Daily News Egypt

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Real estate taxes stir controversy among property owners, industrialists

The topic of real estate taxes is one of the topics that have witnessed great controversy during the last period due to the refusal of the manufacturers and owners of the units to pay the taxes, calling on the government to cancel or postpone them. Hence, the Federation of Egyptian Industries and the chairperson of …


The topic of real estate taxes is one of the topics that have witnessed great controversy during the last period due to the refusal of the manufacturers and owners of the units to pay the taxes, calling on the government to cancel or postpone them.

Hence, the Federation of Egyptian Industries and the chairperson of the economic committee in the House of Representatives lifted the government notes and recommendations by the parliament to abolish those fees on the operating factories.

After that, the Ministry of Finance announced that paying the real estate tax would extend without fines until the middle of August.

Daily News Egypt presents more information about the real estate tax, revealing various opinions on the real estate tax law.

Notably, Samia Hussein, head of the Egyptian Real Estate Taxation Authority, stated earlier in press statements that the real estate that is subjected to tax is the property with a price exceeding EGP 2m in Cairo or outside of it.               

She explained that what is exempted from the real estate tax is the owner that has only one apartment, and the private housing family that exceeds the EGP 2m, while any other type of real estate that exceeds the EGP 2m, including shops, factories, units, etc, are subjected to the real estate taxes.

She further explained that the one who has two units, only one of them is exempted, noting that the owner of the real estate is obliged to apply to the tax office and prove that he does not own any other housing unit.

According to the law, the taxpayer is the natural person or the legal person who has the right to own, use, or utilise the property, where the tenant is not considered a taxpayer, but is a joint partner with the taxpayer to pay the tax within the approved lease.

For his part, Mohamed Al-Bahi, member of the board of directors of the Federation of Egyptian Industries and chairperson of the tax and customs committee of the federation, told DNE that the federation welcomed the law since it was issued in 2008, but the federation called for calculating the tax on the factories according to the factories’ construction value (its value when it was constructed ), not according to the market value (its current value).

Al-Bahi explained that the evaluation of taxes on the factories, should not be according to the market value, as the factories are not units that will be sold, noting that the factories are one of the tools of the state’s production that brings to the state a lot of taxes.

For his part, Samir Saad, who owns a unit in a resort in the North Coast, told DNE that he paid EGP 900 as a real estate tax amount for owning a 160-sqm unit in the North Coast.

He continued that the evaluating of the amount of the taxes is very random, as in the North Coast the services in each resort differ from the other, noting that according to the law, the calculation of the taxes depends on the rental value.

He continued that the rental value is calculated or evaluated depending on the rental value of the three months of the summer, which represents the high season for the North Coast, assuring that the tax should be calculated or evaluated according to the rental value of the 12 months of the year, noting that it is unfair to evaluate the rental value only on three months out of the year.

Saad explained further that there are no rents or services in the North Coast except in those three months.

He revealed that he presented an appeal regarding random evaluating for taxes, but it was ignored.

According to the head of the Egyptian Real Estate Taxation Authority, the real estate tax is fixed from the date of inventory and evaluation of the value of the property for a period of five years, explaining, “If the price of the unit in 2013, when the calculation of the tax happens was EGP 1m, so the authority put tax of EGP 1,000, whereby this number remains constant until 2018.”

Real estate tax is to be paid annually and is due according to this law as of 1 January of the year following taking into procedures of levying and collecting the tax. The tax is collected in two equal instalments. The first instalment is due until the end of July, but this year the minister extended it to the middle of August, while the second is until the end of December of the same year. The taxpayer may pay the whole tax sum at the first instalment’s paying date.

Topics: Real Estate taxes

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https://wwww.dailynewssegypt.com/2018/07/29/real-estate-taxes-stir-controversy-among-property-owners-industrialists/
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