Tax on property income and ownership in Egypt
Taxation Researcher | January 20, 2023
Tax Rate on Rental Income
|Click here to see a worked example|
Nonresidents are taxed on their income from Egyptian sources. Married couples are taxed separately.
There are four recognized categories of income: (1) employment income, (2) business income (which includes income from commercial and industrial activities), (3) non-commercial income, and (4) income from real estate assets. Income is aggregated from all sources and taxed at progressive rates.
Income Tax Rates
|TAXABLE INCOME, EGP (US$)|
|Up to 15,000 (US$542)|
|15,000 – 30,000 (US$1085)|
|30,000 – 45,000 (US$7,759)|
|45,000 – 60,000 (US$1627)|
|60,000 – 200,000 (-US$7233)|
|200,000 – 400,000 (-US$14,466)|
|Over 400,000 (US$14,167)|
|Source: Global Property Guide|
Income exceeding EGP1 million (US$36,165) would be subject to additional tax at 5%.
Rental income derived by nonresidents is taxed at the standard income tax rates. Taxable income is gross rent less income-generating expenses. The maximum deduction allowed to cover operating expenses is 50% of the gross rent.
There is no capital gains tax in Egypt.
For properties located in the Egyptian cities, a flat rate of 2.5% of the gross proceeds is levied on sales of real estate or building sites. No deductions are allowed.
In addition to the real estate and supplementary (khafar) taxes, buildings and agricultural land may also be subject to taxes and duties imposed by the local authorities.
Real Estate Tax
Real estate tax is imposed on Egyptian real properties, payable by the owner. Whether the property is actually leased out or not, the tax is levied on the rental value of the property, which is assessed every 5 years for properties by the tax authority. Real estate tax is levied at a flat rate of 10%.
Real estate tax is levied after deducting the following assumed maintenance expenses:
- 30% of the rental value for residential properties
- 32% of the rental value for non-residential properties
Residential properties with an annual rental value of less than EGP6,000 (US$1,034) is exempt from real estate tax.