(AFP Photo)
President Abdel Fattah Al-Sisi has issued Presidential Decree 117/2014 amending the 196/2008 Property Tax Law, adviser to the Minister of Finance Mesbah Kotb told the Daily News Egypt Wednesday.
The amendment modifies the tax-exempt tranche to include those owning EGP 2m in a single residential unit, while the original law had exempted only those owning a EGP 2m in residential properties in total, Kotb added.
The amended law mentioned that hotels, clubs, hospitals, medical centres and clinics affiliated to the armed forces are exempted from paying taxes. Hospitals, educational institutions and non-profit charities are exempted from paying taxes, but touristic resorts and hotels are subject to the law.
According to the law, residential properties with annual rental values less than EGP 24,000 will be exempted from paying taxes, along with commercial units with annual rental values less than EGP 1,200.
The property tax law was amended in November 2013 to expand the tax-exempt tranche to include industrial and commercial units along with the normal residential tranche. Those owning EGP 100,000 owning in commercial and industrial units were exempted from paying taxes.
The government also approved in March amendments establishing committees in every governorate to determine property tax values. This would be done by surveying and evaluating properties’ rental values according to the condition, geographical location and associated facilities.
Kotb said that the property law has came into effect in January 2014, however, the taxes will be collected in the beginning of each calendar year , and not the fiscal year, which begins in July.
Tax expert Hany Al-Husseiny praised the amendments, but called for an “absolute exemption” for all owners who have only one residential unit regardless of the value. He added that people who own more than one unit are the only segment who shall fall under the law.
Al-Husseiny also added that the armed forces-related entities had to be exempted as they provide a “public service”.
Property taxes that will be collected are expected to amount EGP 3bn, according to the adviser to the finance minister for property taxes Tarek Farrag.
The Property Tax Law was scheduled to take effect in July 2013, but was postponed due to the political turmoil following the ouster of former president Mohamed Morsi in the same month, the finance ministry earlier said. The legislation’s implementation had also been delayed several times since it was issued in 2008.
