More than 220,000 residential buildings, 14,000 factories and 1,500 hotels have been valued to decide the amount of property tax due on them, according to Hassan Abbas, the head of the Real Estate Tax Authority, who was describing the implementation of Egypt's new property tax law. The housing units included luxurious condominiums in areas with privileged locations. Abbas said that the authority had sent information letters to owners of residential units in these areas stating the amount of tax that was due on them. However, Al-Ahram Weekly asked residents of high-end compounds in both the 6 October and New Cairo neighbourhoods if they had received the letters, and no one had received them. Harshjit Oza, a real estate analyst at Naeem Securities, said it was unclear when the government would implement the new law. While the details of the taxes on residential units are relatively clear, those related to industrial establishments and hotels are yet to be clarified. The new property tax law, approved by parliament in 2008 and heavily criticised at the time as an extra financial burden on Egyptian citizens, makes all residential units valued at over LE500,000 taxable. The post-revolution governments have put the law on ice for fear of stirring up social unrest. However, the interim government has said that an amended version of the new law will be implemented in the current fiscal year. The government expects to raise almost LE2 billion from the application of the tax during the current fiscal year. According to minister of finance Ahmed Galal, 25 per cent of the tax yield will be dedicated to localities and 25 per cent to slum development. The new law covers all kinds of real estate units, whether residential, administrative, commercial or industrial. While the original law only taxed properties worth more than LE500,000, the threshold has now been raised to LE2 million, meaning that residential units valued at less than LE2 million are exempt from the property tax. For persons owning multiple properties, exemption is available up to LE2 million, in addition to any flat or building with a rental value up to LE6,000 a year. Anything above that limit is taxable. Committees will be formed to evaluate the rental value of each unit. The rental values will be calculated by a valuation committee formed of three members, a representative of the Real Estate Tax Authority, a real estate valuation expert, and a resident of the area. This committee has a long list of criteria to decide the rental values of units, including their location, the price per square metre in the area, and how old units are. Condominiums will be valued every five years, and taxes adjusted on a five-year basis. The tax rate has been set at 10 per cent of the rental value of a condominium after deducting 30 per cent for a residential condominium and 32 per cent for non-residential buildings as maintenance fees. Criteria for evaluating tourist units will be ready by the end of next month, Abbas said. Tarek Farag, an advisor to the finance minister, said that the ministry had finished forming the committee responsible for receiving taxpayers' appeals about the amount of taxes due on them. This committee would be headed by a member of the judiciary, he said. Taxpayers should submit any complaints within 60 days of the date of receiving their tax statements,” Farag said, adding that the committee would announce its decision on whether to accept or reject a complaint within 30 days of the date of submission. One of the main problems that has been facing the implementation of the new law has been the fact that properties registered in the real estate register only represent five per cent of the total, according to Abbas. “We have called for an initiative to encourage citizens to register their properties through facilitating procedures,” he said. “The Real Estate Tax Authority is establishing a complete database of all the properties in Egypt.” Egypt's old property tax law dates back to 1954. While the tax rate was higher under the old law than under the new one, the value of properties was never revised so the overall yield was little. The new law comes at a time when demand for high-end homes is robust. “Demand for primary homes has remained solid in 2013, despite the ongoing political uncertainty, as apart from the demographic factors, investment in property has provided a shield to Egyptians against inflation and currency depreciation,” Oza noted. The writer is a freelance journalist.