EYE ON EGYPT
Let`s share our interests about Egypt....
Real Estate Market in Egypt
The property market in Egypt
is gathering up steam and riding on the success of an ever growing
tourist economy. With great holiday and investment appeal, Egyptian
property today offers purchasers excellent potential. Property in
Egypt is turning the heads of international property purchasers looking
to buy into an exotic, historical and beautiful country with a warm
climate and a booming tourist industry to match. Egypt is a fascinating
tourist destination with history dating back to around 3200BC and the
warm waters of the Mediterranean and the Red Sea attract divers
worldwide. As a tourist destination with many possibilities to suit all
interests, Egypt attracts increasing numbers of visitors and property
buyers alike who come here to reap its many rewards.
Low off-plan prices (from £30k for a beachside apartment), guaranteed rental yields, holiday homes in the sun and high returns on investment (up to 25% per annum in some locations) are all reasons for the current success of Egypt as a holiday and property location. An increasing number of visitors are buying into luxury apartment complexes in the major holiday hotspots, safe in a strong belief in the current Egyptian government’s commitment to further economic growth and stability. Egypt is now well known as a number one medium haul top end destination for European travellers.
If Egyptian property has captured your imagination, a read through our Egypt Property Guide will help you gather information regarding the properties on offer and their particular locations in Egypt, as well as give you an insight into the property buying process in Egypt. If you are an investor looking at Egypt as a vehicle for maximum returns, please take a look at our Egypt Property Investment section.
The boxes below will take you to a wealth of information about your property purchase in Egypt and help you make an informed decision on whether property in Egypt is a good option for your needs.
Egypt Property Investment
Egyptian property investors rely largely upon the fast growing tourism sector and the fact that property prices remain low for now. Investors are making the most of an increased demand for year round short term holiday rentals as well as a general requirement for quality property for sale. Second homes are equally popular as Egypt grows in popularity amongst the international jet set who see Egypt as a highly appealing, exotic medium haul holiday destination.
Overall the prospects for the property market in Egypt appear positive. Egypt enjoys good relations with many of the world’s most influential economies and is a politically stable country. The economic climate in Egypt is ripe for investment with a number of government incentives now attracting a growing native middle class, while giving foreign investors a wider market than ever before for their investments in Egyptian property.
While prices remain low and capital growth projections are high, many careful investors are purchasing property in high demand resorts with excellent returns on investment. Egypt is increasingly popular with British buyers and in 2006 they increased by 50% compared to the previous year.
Egyptian Property Market Overview
The Egyptian property market is mainly concentrated on the Red and Mediterranean Sea coasts, also the major cities of Luxor, Cairo and Alexandria. Property purchasers have been benefiting from the Egyptian government’s sweeping reforms designed to attract further inward investment and the country has seen a sharp increase in tourism in recent years.
The Egyptian government’s commitment to economic growth and reform since 2004 has paid off and a number of new Customs reforms, tax incentives and privatizations have created a growing economic climate that encourages foreign investment in Egyptian property. Today a number of heavy weight international property developers have invested in Egypt and worldwide purchasers widely regard Egypt as a safe and solid investment, while enjoying the many delights the country has to offer.
Reasons why property in Egypt is a good investment
Low property prices starting at around £30k
Year-on-year capital appreciation of between 20-30%.
Beautiful, well established tourist hotspots suitable for varied tourist interests, from excellent diving and snorkeling to cultural and historical locations
Stunning natural and unspoilt landscape
Steady annual growth in tourist figures
Less property taxes than paid in the EU and USA.
No capital gains tax
Warm desert climate with temperatures ranging from 14°C in winter to 30°C in summer
Politically stable country
Strong economic growth and inward investment create a rich investment climate.
Well renowned developers creating luxury resorts to cater for Egypt’s new influx of international tourists
Easy air access from many European destinations makes Egypt a popular medium haul holiday location
Cairo , Luxor and Sharm el Shekh International airports are being modernized and a new terminals opened in 2007.
Charter flights available through Marsa Alam international air port all year.
Charter flights available through Luxor International airport.
Relatively low cost of living and maintenance costs
English is widely spoken, after Arabic, in most the big and touristic cities. Italian, russain are widely spoken in Sharm el Sekh, Hurghada and Marsa Alam
Why Invest in Egypt?
Egypt today offers a solid economic climate in which to invest. An emerging property market in key tourist locations is already offering excellent returns on investment and shrewd investors are eager to get involved, while prices remain stunningly low.
Natural and Cultural Factors
Warm desert climate with year-round sunshine and average temperatures of between 14 and 30°C.
Great natural beauty with fantastic scenery - stunning white sandy beaches, coral reefs and desert landscapes, giving rise to great recreational activities.
Rich cultural and historical interest, dating back some five thousand years.
Friendly nature of the Egyptian people, many of whom speak some English.
Easy access via direct flights from many international airports. At only 5 hours journey time, Egypt is the number one medium haul tourist destination from Europe.
Economic Factors
Property price returns of up to 30% per annum in some locations.
Low cost of living and very low property prices.
Strong economic growth in recent years (GDP 4.5% in 2005).
Government reforms and incentives for foreign investment, making the property investment process easier than ever before.
Strong growth in the tourist industry due to increased air services, modernization of amenities and luxury resorts under construction.
Property Tax – Egypt
Egyptian property purchase is exempt from many taxes normally paid elsewhere. Below is an outline of Egypt’s property tax laws to help familiarize you with the system.
Today, taxes on the sale of real estate bear no relation to standard property taxes or real estate registration fees in other countries. The Egyptian government is currently debating a reform of property registration fees and is proposing to impose international-standard property taxes.
Tax From The Sale of Property
In Egypt, the sale of land and/or buildings is taxed in the same way and the system is very simple. Tax is chargeable at 2.5% of money earned from a sale and it must be filed as tax owed by April 1st. For example: an individual or corporation selling a piece of land for LE 100,000 must file a tax return by March 31st stating that LE 2,500 is owed in taxes.
The only exceptions (under Article 42) are income from the sale of inherited land or other real estate is tax which are free, as is any income earned from the sale of land or other real estate you own through a shared capital company, provided you keep your shares in the company for at least five years after the sale. This last provision is designed to prevent the formation of “paper” companies to dodge tax liabilities from the sale of properties.
Stamp Duty / Capital Gains Tax / Inheritance Tax
In Egypt there is no stamp duty or capital gains tax payable on real estate and, if you are a British resident, you will also avoid inheritance tax on any Egyptian properties that you decide to pass on to your loved ones.
Tax on Rental Received
Any person, partnership or company must file a tax return detailing all rent or other income derived from real estate by March 31st of each year. For rental income the basic threshold for taxation is LE 5,000 per annum and, provided your rental income is less than this figure, you need not declare your received income.
For rental incomes greater than LE 5,000, 50% of the total amount is tax-free to cover maintenance and other expenses associated with owning the property. The balance is taxable at a standard rate of up to 20% rate of personal and corporate income. For example, you rent out a flat for LE 8,000 per month, grossing LE 96,000 in rental income per year. Simply subtract the deduction against costs of 50%, leaving LE 48,000 as taxable income. The balance owed in taxes is LE 6,100.
Mortgages - Egypt
The mortgage market is underdeveloped in Egypt and foreigners cannot yet obtain a mortgage. However the Egyptian government is shortly due to implement a new mortgage law enabling purchasers to take out property loans. This will open up the market considerably and create a storm of development and real estate activity in the near future.
The current lack of a fully developed lending system has slowed the construction industry in Egypt, even though Cairo is one of the most densely populated cities in the world and there is currently a high demand for new housing. This situation is destined to change as soon as mortgage facilities become more commonplace. Meanwhile, in the absence of mortgage facilities, wise purchasers are buying up existing opportunities now while prices remain low.
For now buyers usually arrange alternative financing in their own countries or free up equity via a re-mortgage or equity release system, allowing them to purchase their Egyptian property outright.
Some off-plan developmentsoffer their own finance arrangements of up to 100% finance, depending on status. The charges applicable vary according to developer and repayments are usually indexed.
If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance
Low off-plan prices (from £30k for a beachside apartment), guaranteed rental yields, holiday homes in the sun and high returns on investment (up to 25% per annum in some locations) are all reasons for the current success of Egypt as a holiday and property location. An increasing number of visitors are buying into luxury apartment complexes in the major holiday hotspots, safe in a strong belief in the current Egyptian government’s commitment to further economic growth and stability. Egypt is now well known as a number one medium haul top end destination for European travellers.
If Egyptian property has captured your imagination, a read through our Egypt Property Guide will help you gather information regarding the properties on offer and their particular locations in Egypt, as well as give you an insight into the property buying process in Egypt. If you are an investor looking at Egypt as a vehicle for maximum returns, please take a look at our Egypt Property Investment section.
The boxes below will take you to a wealth of information about your property purchase in Egypt and help you make an informed decision on whether property in Egypt is a good option for your needs.
Egypt Property Investment
Egyptian property investors rely largely upon the fast growing tourism sector and the fact that property prices remain low for now. Investors are making the most of an increased demand for year round short term holiday rentals as well as a general requirement for quality property for sale. Second homes are equally popular as Egypt grows in popularity amongst the international jet set who see Egypt as a highly appealing, exotic medium haul holiday destination.
Overall the prospects for the property market in Egypt appear positive. Egypt enjoys good relations with many of the world’s most influential economies and is a politically stable country. The economic climate in Egypt is ripe for investment with a number of government incentives now attracting a growing native middle class, while giving foreign investors a wider market than ever before for their investments in Egyptian property.
While prices remain low and capital growth projections are high, many careful investors are purchasing property in high demand resorts with excellent returns on investment. Egypt is increasingly popular with British buyers and in 2006 they increased by 50% compared to the previous year.
Egyptian Property Market Overview
The Egyptian property market is mainly concentrated on the Red and Mediterranean Sea coasts, also the major cities of Luxor, Cairo and Alexandria. Property purchasers have been benefiting from the Egyptian government’s sweeping reforms designed to attract further inward investment and the country has seen a sharp increase in tourism in recent years.
The Egyptian government’s commitment to economic growth and reform since 2004 has paid off and a number of new Customs reforms, tax incentives and privatizations have created a growing economic climate that encourages foreign investment in Egyptian property. Today a number of heavy weight international property developers have invested in Egypt and worldwide purchasers widely regard Egypt as a safe and solid investment, while enjoying the many delights the country has to offer.
Reasons why property in Egypt is a good investment
Low property prices starting at around £30k
Year-on-year capital appreciation of between 20-30%.
Beautiful, well established tourist hotspots suitable for varied tourist interests, from excellent diving and snorkeling to cultural and historical locations
Stunning natural and unspoilt landscape
Steady annual growth in tourist figures
Less property taxes than paid in the EU and USA.
No capital gains tax
Warm desert climate with temperatures ranging from 14°C in winter to 30°C in summer
Politically stable country
Strong economic growth and inward investment create a rich investment climate.
Well renowned developers creating luxury resorts to cater for Egypt’s new influx of international tourists
Easy air access from many European destinations makes Egypt a popular medium haul holiday location
Cairo , Luxor and Sharm el Shekh International airports are being modernized and a new terminals opened in 2007.
Charter flights available through Marsa Alam international air port all year.
Charter flights available through Luxor International airport.
Relatively low cost of living and maintenance costs
English is widely spoken, after Arabic, in most the big and touristic cities. Italian, russain are widely spoken in Sharm el Sekh, Hurghada and Marsa Alam
Why Invest in Egypt?
Egypt today offers a solid economic climate in which to invest. An emerging property market in key tourist locations is already offering excellent returns on investment and shrewd investors are eager to get involved, while prices remain stunningly low.
Natural and Cultural Factors
Warm desert climate with year-round sunshine and average temperatures of between 14 and 30°C.
Great natural beauty with fantastic scenery - stunning white sandy beaches, coral reefs and desert landscapes, giving rise to great recreational activities.
Rich cultural and historical interest, dating back some five thousand years.
Friendly nature of the Egyptian people, many of whom speak some English.
Easy access via direct flights from many international airports. At only 5 hours journey time, Egypt is the number one medium haul tourist destination from Europe.
Economic Factors
Property price returns of up to 30% per annum in some locations.
Low cost of living and very low property prices.
Strong economic growth in recent years (GDP 4.5% in 2005).
Government reforms and incentives for foreign investment, making the property investment process easier than ever before.
Strong growth in the tourist industry due to increased air services, modernization of amenities and luxury resorts under construction.
Property Tax – Egypt
Egyptian property purchase is exempt from many taxes normally paid elsewhere. Below is an outline of Egypt’s property tax laws to help familiarize you with the system.
Today, taxes on the sale of real estate bear no relation to standard property taxes or real estate registration fees in other countries. The Egyptian government is currently debating a reform of property registration fees and is proposing to impose international-standard property taxes.
Tax From The Sale of Property
In Egypt, the sale of land and/or buildings is taxed in the same way and the system is very simple. Tax is chargeable at 2.5% of money earned from a sale and it must be filed as tax owed by April 1st. For example: an individual or corporation selling a piece of land for LE 100,000 must file a tax return by March 31st stating that LE 2,500 is owed in taxes.
The only exceptions (under Article 42) are income from the sale of inherited land or other real estate is tax which are free, as is any income earned from the sale of land or other real estate you own through a shared capital company, provided you keep your shares in the company for at least five years after the sale. This last provision is designed to prevent the formation of “paper” companies to dodge tax liabilities from the sale of properties.
Stamp Duty / Capital Gains Tax / Inheritance Tax
In Egypt there is no stamp duty or capital gains tax payable on real estate and, if you are a British resident, you will also avoid inheritance tax on any Egyptian properties that you decide to pass on to your loved ones.
Tax on Rental Received
Any person, partnership or company must file a tax return detailing all rent or other income derived from real estate by March 31st of each year. For rental income the basic threshold for taxation is LE 5,000 per annum and, provided your rental income is less than this figure, you need not declare your received income.
For rental incomes greater than LE 5,000, 50% of the total amount is tax-free to cover maintenance and other expenses associated with owning the property. The balance is taxable at a standard rate of up to 20% rate of personal and corporate income. For example, you rent out a flat for LE 8,000 per month, grossing LE 96,000 in rental income per year. Simply subtract the deduction against costs of 50%, leaving LE 48,000 as taxable income. The balance owed in taxes is LE 6,100.
Mortgages - Egypt
The mortgage market is underdeveloped in Egypt and foreigners cannot yet obtain a mortgage. However the Egyptian government is shortly due to implement a new mortgage law enabling purchasers to take out property loans. This will open up the market considerably and create a storm of development and real estate activity in the near future.
The current lack of a fully developed lending system has slowed the construction industry in Egypt, even though Cairo is one of the most densely populated cities in the world and there is currently a high demand for new housing. This situation is destined to change as soon as mortgage facilities become more commonplace. Meanwhile, in the absence of mortgage facilities, wise purchasers are buying up existing opportunities now while prices remain low.
For now buyers usually arrange alternative financing in their own countries or free up equity via a re-mortgage or equity release system, allowing them to purchase their Egyptian property outright.
Some off-plan developmentsoffer their own finance arrangements of up to 100% finance, depending on status. The charges applicable vary according to developer and repayments are usually indexed.
If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance