An amended real estate tax law is slated to go into effect in Egypt in early July.
The Egyptian Ministry of Finance and the Tax Authority have finished updating the legislation, the implementation of which has been postponed several times since it was issued in 2008.
Specialists and investors told Al-Shorfa they see the new taxes as fair and equitable to property owners.
The amendments aim to achieve social justice, said Mohammed Ezzat, a legal advisor to several real estate development companies.
They provide for the allocation of 25% of tax proceeds to improve conditions in slums, while 25% go to the provinces and the rest to the country's public treasury, he said.
"The amendments do not involve any tax increases, as they are regulatory in nature and contain amendments to some legal aspects that offer relief to both parties," Ezzat told Al-Shorfa.
Under the new amendments, educational institutions, hospitals, clinics, shelters and non-profit charities will be given a permanent exemption from taxes, while a previous exemption on buildings owned by political parties, trade unions and professional organisations will be annulled, he said.
The amendments also increase the exemption limit set for each unit in a residential property to 2 million pounds ($289,000), while limiting the exemption to only one unit per owner.
Other amendments stipulate regulations that apply to cases where a property is used for both residential and commercial purposes.
Property ownership also is addressed in the amendments, and specific guidance is offered for those holding certified and non-certified property deeds, he said.
"The tax now applies to [properties with] non-certified deeds as well, which addresses the causes of many of the legal disputes between property owners on the one hand and property owners and tax authorities on the other," he said.
"The most important provision of the new law and its amendments is that it levies a tax on all types of buildings in all Egyptian provinces, while in the past taxes were levied [on properties] inside cities only," said Shamel al-Muallem, head of a tax appeals committee chamber at the Ministry of Finance.
Collection is expected to be postponed for six months after the law goes into effect, until January 2014, "to allow for the completion of an advertising campaign to spread awareness among citizens about the importance of adhering to the real estate tax system and to inform them about the new amendments", al-Muallem told Al-Shorfa.
An electronic system will be adopted in the coming period that issues a national identification number for each real estate property to prevent duplication, he said. This also will contain full data on property owners and the real estate they own in every province.
"This would facilitate and accelerate the transfer of ownership and tax liability when properties are sold," he said.
The Real Estate Tax Authority has begun training its staff on the new systems, said Hosni Abdel Raouf, who works for the Authority's collection committees.
"All regions have been surveyed by special committees for the purpose of collecting 2010 and 2011 taxes, and work has commenced on 2012 taxes in areas that are accessible and can be surveyed, given the security situation," he told Al-Shorfa.
The survey and collection process is currently focused on some areas of Cairo, al-Maadi and the northern coast, Abdel Raouf said.
Real estate dealers, including Farouq Abdul Latif, welcomed the new amendments.
"The new tax amendments will give the Egyptian real estate sector legal transparency, which is required to attract new investors to all sectors of the Egyptian market, namely the tourism, residential and commercial sectors," he told Al-Shorfa.
"Investment in the real estate market is a long-term investment, and therefore an appropriate one under the current economic conditions, which carry some risks," he said.