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Egypt property tax shake-up will exempt first homes New law will impose progressive taxes on rental properties and take effect on 1 July if passed by parliament, claims newspaper
Egypt's property tax law may be amended to exempt private homeowners, Al-Ahram daily newspaper reported on Thursday. The amended law will take effect on 1 July if passed by the country's newly-elected parliament. Changes to Egypt's archaic property tax laws were first mooted in 2008 but never properly applied due to resistance from owners of large properties. The new amendments include exempting one private residential property for each taxpayer. Any additional home will, however, be subject to tax. A progressive burden will be imposed on properties with a market value of LE500,000 (approx. $83,000) or more, and an annual rent value exceeding LE6,000 (approx. $1,000). The amended law also suggests changing the spending of revenues generated from property taxes. Under the new proposal, 50 per cent of the funds raised will be used to improve housing conditions in poorer areas. The law stipulates that local committees are to be formed to estimate the annual rent value of properties. From this figure, 30 per cent will be deducted to cover maintenance expenses, and then LE6,000 exempted. The remaining figure will be taxed at a rate of 10 per cent: Example: Annual Rent LE9,000 Less: Maintenance (30%) LE6,300 Less: Exemption Amount (LE6,000) LE300 Tax amount (10%) LE30 Last October, Egypt's ruling Supreme Council of the Armed Forces (SCAF) postponed the application of a property tax from January 2012 to January 2013. The finance minister at the time, Hazem El-Beblawi, said that one of the main reason for the delay as to fix deficiencies in the law and help accommodate the "social and economic needs" of the Egyptian people. But now Egypt's widening budget deficit and increasing currency pressures is forcing the government to tap into all available sources of revenues. Last July, SCAF also passed a tax increase on individual and corporate income. Annual incomes above LE10 million are now taxed at 25 per cent, up from 20 per cent. Egypt currently applies a flat rate of 20 per cent for annual incomes of between LE40,000 and LE10 million. A 15 per cent rate is charged on annual income levels between LE20,000 and LE40,000. Those paid less than LE20,000 per year are taxed at 10 per cent. http://english.ahram.org.eg/News/35246.aspx
