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Monday, 11 February 2019

FinMin denies plans to repeal real estate tax exemption for private homes in Egypt

FinMin denies it has plans to repeal real estate tax exemption for private homes: The Finance Ministry issued a statement yesterday denying our report that it is mulling scrapping an exemption on real estate taxes for private homes worth less than EGP 2 mn under a new Real Estate Tax Act currently in the works. According to the statement, the ministry will finish soon drafting its proposed amendments to the existing Real Estate Tax Act and will hold public consultations before shipping the act to Cabinet and the House of Representatives for sign-off.

What would the proposed amendments entail? The proposed amendments are largely aimed at reducing discrepancies in the tax rates imposed on similarly-valued properties, in addition to alleviating some of the tax burden on factories, according to the statement. The amendments would, if passed, overhaul the government’s appraisal system to increase its efficiency. A government source had told us back in December that the ministry was looking to introduce a digital system through which real estate would be appraised, and had enlisted Ain Shams University to appraise the value of real estate in the country based on location and prepare an electronic database of prices.

The government is looking at earmarking up to 50% of its annual haul from the real estate tax for the benefit of informal settlements, the statement says.

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