UK Resident Selling Property in Egypt

Egypt’s property purchase process is bit challenging. However, Egypt’s 1996 Law No. 230 allows foreigners to purchase real estate.

 

Two pieces of real estate cannot exceed 4,000 square metres (sq. m.), and the purpose must be for a member of one’s family to reside there. There is a two-month time frame for getting Council of Ministers approval before making the purchase.

 

Property registration in Egypt

For the first five years, the property cannot be sold or rented. A public commercial bank must receive the purchase price in foreign currency before it can be delivered to Egypt (though this provision of the law is not enforced). A property must be rented out furnished after five years to avoid tax consequences (see tax section). The obvious solution for a foreigner married to a local is to have his or her spouse purchase the property and then rent it out unfurnished like the locals do, which usually avoids paying taxes.

 

There is now an EGP2,000 (US$345) cap on the 3 percent registration fee that applies to all properties purchased in Egypt. As a result, registration costs have decreased. It’s still a lengthy process, nonetheless.

 

ASSURANCE BASED ON “SIGNATURE VALIDITY COURT VERDICT”

 

In Sharm El Sheikh, property cannot be formally registered.

 

An administrative decree issued in 2005 overturned the 1996 property law in Sharm el Sheikh. Consequently, property in Sharm el Sheikh has a different regime.

 

Under the decree, foreign buyers in Sharm el Sheikh are only allowed to acquire 99-year leases, not freehold rights. As a result, foreign purchasers will need to go through the signature validity court verdict procedure, as well as additional steps. At City and Urban International, Sharm el Sheikh, Sharm’s legal expert is Zeiad Yehia (zeiad.yehia@edgebridgelawfirm.com or +20 12 334 4988). Readers of Global Property Guide can get free legal advice from him if they wish.

 

 

Since it allows foreigners to buy as many properties as they want and then rent or sell them as they please, the’signature validity court verdict’ method may well become the most popular choice for foreign buyers even outside of Sharm.

 

There are a few things to do:

  • The property should have a government-issued “negative” certificate stating that there are no registered mortgages, pledges, or other rights to the property.
  • There must be a certificate from the tax authorities stating the amount of taxes that must be paid.
  • A contract for sale or usufruct should be drafted. It is up to the contract terms to determine whether or not the sale is valid. This means that a detailed contract, outlining the property boundaries, purchase price, acquisition method, and payment method is essential for the buyer. The contract must be written in Arabic because the courts only accept Arabic as a legal language.
  • Buyers must grant their lawyer power of attorney to act on their behalf, which necessitates that the buyer first obtain a multi-entry visa. Afterwards, the attorney files a legal action to obtain a court verdict certifying that a signature on a sale / usufruct contract is authentically signed by the seller. It will take six to eight months to complete this suit.

 

A “signature validity court verdict” and a registration are two methods that each have their own advantages and disadvantages.

 

Legal Fees

Global Property Guide advises buyers to hire their own Arabic-speaking lawyers due to the complex property registration process. In courts, only legal documents in Arabic are accepted. There are legal fees of about 3% of the property’s value.

 

Estate Agent fee

 

There is a 2.5 percent to 3 percent (plus 10 percent sales tax) real estate agent fee paid by the seller.

 

Transfer Fee

 

Immovable property sales and transfers are subject to a 2.5 percent transfer fee.

 

This tax is considered a transaction cost because it applies to all of a person’s gains. On the sale of property in an Egyptian city, capital gains tax is imposed at a rate of 2.5 percent of the gross gains.

 

If you need to buy or sell property in Egypt fast online there is some advice above.

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