What are Property Taxes and & Which Assets are Exempted?

The Real Estate Tax Law was amended recently, and although this tax has existed in the law books since 1954 it was called “Awayed” or revenue and was only imposed on rented properties.

The Awayed tax could reach up to 10% for non-residential units, and between 10%-40% for residential units depending on the segment in which the property falls under. The Awayed were paid by real-estate owners who rented out their properties.

In 2014 the law was amended so that all real estate built on Egyptian soil and valued at more than 2 million Egyptian pounds became taxable with some exceptions. After this amendment many more buildings became taxable, and the Awayed was completely abolished to be replaced by real estate tax.

“The rental value of the building is determined by a specialized committee from the Tax Authority

What do you know about real estate investment? Don’t miss our article on A Beginner’s Guide to Real Estate Investment 

Real estate tax explained

The Tax Rate:

The tax rate is standardized at 10% of the annual rental value of the building after deducting expenses (30% for residential buildings and 32% for non-residential buildings). 

The rental value of the building is determined by a specialized committee from the Tax Authority

Also read Everything you need to know on how to pay real estate tax 

Properties exempted from the real estate tax:

• Buildings or apartments valued at less than 2 million Egyptian pounds.
• The primary residence of a person or family as long as its rental value is less than 24,000 EGP per year.
• Any non-residential property with a rental value less than 1,200 EGP per year.
• Buildings that are still rented under the old rent system.
• Buildings that are considered for public use.
• Government buildings and building that belong to the army.
• Political parties’ headquarters and branch offices.
• Youth and sports centers.
• Non-profit buildings such as hospitals and schools.
• Buildings owned by a foreign government entity.
• Unused land.
• Cemeteries.