Foreigners buying property in Egypt: Law 230, the 2.5% disposition tax and the buildings tax

Foreign ownership of a private residence (Law 230 of 1996)

• A non-Egyptian may own at most two properties throughout the Republic, whether built property or vacant land, for private residence for himself and his family (spouses and minor children), without prejudice to the right to own the property needed to carry on a business activity licensed by the competent Egyptian authorities (article II).
• The area of each property may not exceed 4,000 square metres.
• The property must not be classified as an antiquity under the Antiquities Protection Law.
• The Prime Minister may grant exceptions from the conditions in items 1 and 2. The Council of Ministers may lay down special conditions for ownership in areas it designates as tourist areas and new urban communities.
• The conditions of this law do not apply to property owned by a foreign government for use as premises of its diplomatic or consular mission, annexes, or the residence of the head and members of the mission, subject to reciprocity, or to property owned by an international or regional organization.
• A non-Egyptian who acquires ownership under this law may not dispose of the property by any act transferring title before five years from the date of acquisition of ownership; the Prime Minister may, however, authorize this in cases he deems appropriate (article V). The GAFI note states that the Minister of Justice has been entrusted with the Prime Minister’s powers under articles II and V by Prime Minister Decrees 686 of 2013 and 2725 of 2024. The competent authority is the Real Estate Publicity and Notarization Department at the Ministry of Justice.

Disposition tax (article 43, Law 151 of 2026)

A tax of 2.5% is imposed, without any reduction, on the total value of a disposal of built property or of land for building, except in villages, however many disposals there are, whether the property is as it stands or after construction, whether the disposal covers the whole property, part of it or a housing unit, whether the land is owned by the taxpayer or by another, and whether the contracts are registered or not. The total is taken from the disposal contract; if that value is not followed, the burden of proof lies on the tax authority. The transferor must pay the tax within sixty days of the disposal; the delay charge in article 110 of the Income Tax Law runs from the day after that period ends. Exceptions in the article include contributing the property as a capital contribution in kind to a joint-stock company if the matching shares are not disposed of for five years; a will, donation or gift to ascendants, spouses or descendants; creating a usufruct or a lease of more than fifty years, which is treated as a taxable disposal; and forced sales, expropriation, and gifts to the government, local units, public legal persons or public-benefit projects, which are not subject to the tax.

Annual buildings tax (Law 196 of 2008)

Article 12: the rate is 10% of the annual rental value of buildings subject to the tax, after excluding 30% of that value for residential units and 32% for non-residential units, for all expenses borne by the taxpayer including maintenance. Annual rental value is assessed by survey and estimation committees in each governorate, according to building standard, location and utilities. The Authority’s current page states that a unit used as the taxpayer’s main private residence for himself and his family is exempt if its net annual rental value is less than EGP 24,000, and the excess is taxed — the family being the taxpayer, spouse and minor children; and that a unit used for commercial, industrial, administrative or professional purposes is exempt if its net annual rental value is less than EGP 1,200, and the excess is taxed. The worked examples on that page follow this formula. The person liable is the natural or legal person who has ownership, usufruct or exploitation; a tenant is not the person liable, but is jointly liable to the extent of the rent due.

Official example (a housing unit with an annual rental value of EGP 36,000)

The figures are from the Real Estate Tax Authority’s official site. For a main private residence: net 25,200 after the 24,000 exemption, tax EGP 120 a year. For a residential unit that is not the main home: no 24,000 exemption, tax EGP 2,520 a year. For a commercial use, the Authority’s example with a rental value of EGP 2,700 gives tax of EGP 63.6 a year.

FAQ

Can a foreigner own a third property?

Article II of Law 230 limits private residences to two properties nationwide, but it does not affect the right to own property needed for a licensed business, and it allows the Prime Minister to grant exceptions from the number and area conditions.

How Wang Fu can help

• Preparing and translating the file (Chinese, Arabic, English).
• Interpreting when you meet the authorities or file papers.