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Real Estate Tax Law – Law No. 117 of 2014

In 2008, the government at the time imposed The Real Estate Tax Law (Law No. 196 of 2008) on properties used for residential or non-residential purposes. The law was amended several times, including through Law No. 117 of 2014. The amendments improved the law and made it more adequate for covering costs needed by the state and its people. While the government had not pressed on the matter, given the economic situation in the past few years, the Ministry of Finance released a booklet in August 2018 not only explaining some aspects of the law, but also issuing citizens a final warning to pay by October 15, 2018 instead of facing a fine.

The Scope and Subject of the Law:

  • The law applies to all real estate, regardless of its permanency, location (below or above ground, on land or water), its occupation status, and whether or not it is occupied in exchange for financial return.
  • The taxpayer is the owner of the property, whether they are a natural or a juridical person. If they are a juridical person, their legal representative will be responsible for fulfilling the tax duty. Those who rent property will not be considered tax payers, but are joint partners of the tax payer to pay the tax within the duration of their lease.

Evaluation and Payment:

The law states that the tax amount will be determined by an evaluation based on the geographic location, building standards, and the materials and utilities connected to the unit. Then, deductions are made for any maintenance expenses by the tax payer (limited to 30% for residential units and 32% for non-residential units). The amendments have created a committee in each governorate to evaluate properties, to be created by the relevant Minister. The evaluation must then be communicated to the owner clearly, as per the Executive Regulations of the law. The owner may then choose to appeal to their governorate’s appeal committee, which are to be made The tax amount determined is then to be paid every year on January 1st, either in full or in two installments before the due date, one in June and one in December. Properties are to be re-evaluated every five years, but the amount payable cannot increase by more than 30% at re-evaluation for residential properties and 45% for non-residential properties.


Of course, the law leaves space for a number of exemptions. For example, if the family owns more than one property, the first residential unit will be exempted from tax if its unit value is under approximately EGP 2 million. However, all properties, other than the one they reside in, will be taxed, even if they are valued at less than EGP 2 million. This is applicable even if the other properties are under the names of the spouse or children. Moreover, there are some exemptions to residential units whose net annual rent is less than EGP 24,000 and to industrial and administrative units whose rent is under EGP 1,200.

Further, the law completely excludes:
  • Properties built for registered charities;
  • Non-profit hospitals, clinics, and orphanages;
  • Headquarters of political parties, so long as they are used for the purpose;
  • Properties used for registered youth clubs;
  • Non-profit event halls;
  • Clubs, hotels, and event halls owned by the armed forces;
  • Properties build for the benefit of nearby farmland;
  • Properties owned by foreign governments.

Other than the exceptions stipulated above, the owners of commercial properties or of multiple residential properties will have to pay real estate tax. However, we believe that this is an adequate and necessary measure. Not only are similar laws imposed by developed countries all over the world, but changes in Egypt’s economy call for this law to be imposed strictly and immediately. Owners of multiple homes should be responsible for contributing this small amount in return for different public services – including the up-keeping of the roads they require to reach said chalets and residences. Moreover, the real estate taxes paid will be deductible form corporate tax expenses. Incurring money this way ensures income for the local government and guarantees financial decentralization.

All in all, this law is a crucial measure, the imposition of which has been long overdue. While it has legally been in place for many years, the government’s decision to choose to impose it strictly by the end of 2018 was a correct and necessary measure. For that reason, we believe that it is important for all property owners to become accustomed to this law – and to its importance.

Written By

Maryam Iraq – Attorney At Law

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