Hotels to pay real estate taxes based on investment value
Hotels to pay real estate taxes based on their investment value? The ministries of finance and tourism reached an agreement yesterday on the assessment of real estate taxes for hotels, Tourism Minister Rania Al Mashat told the press yesterday. Under the agreement, taxes for hotels will be calculated based on the project’s nominal investment value as determined by a property’s government-assigned star rating, according to Al Mashat. The minister explained that the Tourism Development Authority sets a standard investment value of EGP 50,000 for a single one-star hotel room. The move means to bring regulations in line with the 2008 real estate tax law, which stipulates that guidelines be set for the tax treatment of industrial properties in fields including tourism and oil and gas.
Background: The Finance Ministry is working on a new real estate tax formula as part of a larger overhaul that will affect both businesses and private landholdings, sources had told us in June. This new formula would set “clear and simplified” guidelines for the tax assessment of industrial properties, hotels, ports and airports. We had also learned that the ministry was also developing new provisions for taxing properties in the oil and gas industry. The move has been met with a backlash.
Tourism development strategy in the works: On a related note, the Tourism Ministry is expected to announce in October the details of a comprehensive plan to revamp and develop the sector, Al Mashat said, Youm7 reports.