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Thursday, 10 February 2022

Selling your house could soon become cheaper

Another potential boon for homeowners: The House of Representatives’ Planning and Budget Committee yesterday greenlit amendments to the Income Tax Act that would overhaul the property disposal tax to reduce selling costs for home owners, according to Al Mal. The bill would see property owners pay a lump sum tax ranging from EGP 1.5k-4k when they register real estate assets that were sold before the original law came into effect on 19 May, 2013. Properties sold after that date would continue being subject to the current 2.5% tax paid by sellers on properties’ disposition or quick sale value.

How is the new tax calculated? Sellers of properties worth up to EGP 250k will be taxed a lump sum of EGP 1.5k, while properties sold for between EGP 250k- 500k will be taxed EGP 2k. Property sales of EGP 500k-1 mn will be taxed EGP 3k, while properties costing more than EGP 1 mn will be taxed EGP 4k. This would put the disposal tax at less than 1% of the value of the property in all cases.

This comes as part of a package of changes geared at encouraging more people to register their ownership contracts with the national property registry. The committee’s approval comes a day after amendments to the Real Estate Registry Act that aim to simplify property registration procedures received preliminary approval from the House.

What’s next for the bill: The bill will be up for further discussion by the wider House of Representatives. If it gets the final nod, it will be sent to President Abdel Fattah El Sisi to be signed into law. The amendments to the Real Estate Registry Act, meanwhile, will be discussed further in a few weeks’ time before receiving final approval, Planning and Budget Committee head Fakhry Elfiky told Yahduth Fi Masr (watch, runtime: 5:51).

OTHER LEGISLATION NEWS: The House of Representatives approved in principle a draft law establishing the Egyptian Health Council to regulate medical training and licensing, which got preliminary approval last week, Youm7 reports.

EDITOR’S NOTE- This story was updated on 10 February, 2022 to correct the tax on properties sold before the law’s original issuance.

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