How to Buy Property in Egypt
Dalia, Wednesday, 20 November 2013
This article is part of a series of 8 articles about buying property in Egypt. The other articles in the series cover the following topics:
Egypt has always been a hotspot for investors because of its geographical location, its sunny climate, and its relatively low prices, whether it is the price of the sale itself or the price of the property tax.
It is the country that real estate investors come to when they are looking for an immediate income with long-term capital growth and the freedom of potentially reselling in the future and still making a profit. Egypt’s investment market relies heavily on the success of its tourism industry which has been through ups and downs lately, but has regained its footing once again. Egypt now attracts more overseas property purchases than ever before. This is also a result of the nonexistence of both capital gains tax and inheritance tax which makes the cost of buying very lucrative.
The first thing to do before purchasing property in Egypt is to get a good, qualified international property investment lawyer. Your lawyer will then reserve the property you wish to buy and pay a deposit as a way of finalizing the reservation process. The amount of this deposit depends mainly on the total purchase price.
Even though foreigners can buy property without living in Egypt, yet it will become necessary to enter the country to sign papers, documents, and contracts. The buying prices may be moderate in Egypt, but the process is complicated and may take several months to complete.
Therefore, you will need to apply for an entry visa, which is valid for one year and can be obtained without any hassle via your lawyer. It is one of the easy steps in this entire process. Later on, you can transfer the entry visa into a residency visa which can be for either three years or five, and must be renewed accordingly. Be aware, however, that it will not grant you the right to work, so if you are planning to continue your stay in Egypt, you must obtain a work visa once you have bought your property and established residency. As soon as you have your visa, you will need to fill out a document to give your lawyer power-of-attorney. This document is crucial since the lawyer will need to act on your behalf in the courts of Egypt. The fees for a residency visa are about 150.00 EGP and the power of attorney paper costs about 60.00 EGP.
Next, the seller must provide a property tax statement from the Tax authority to ascertain that the property has undergone a tax assessment. This step is based on the Law no. 114 of 1946 to protect both the buyer and the seller.
After that, the seller will also provide a private purchase contract. This contract must be in Arabic and translated into English. Your lawyer will take the signed contract and present it in an Egyptian court to get the approval of the council of Ministers, which usually takes about two months to obtain.
This approval is necessary for the buyer to proceed with the following steps needed to finalize the sale because it entails a survey of the land by the Egyptian Surveying Authority. It also entails a report drawn up by the Measurement Department. All of these documents are then returned to both the buyer and the seller.
Finalizing the transfer of ownership process requires legalizing all the necessary documents. Both parties must also decide on a method of payment. Some purchasers pay a percentage of the entire purchase price in advance and the remaining on delivery. Others prefer to pay in installments. This is a good option, especially if you are purchasing property that is still being developed because it means you can pay over a period of 3 or 4 years at 0% interest. If you cannot find the means to get a hold of the entire purchase price, then you can look for outside help, as loans or mortgages. You must bear in mind, however, that mortgages are not as common in Egypt as one might think.
Once the full price has been paid, and you have obtained the ownership rights in your name, then your lawyer will begin the registration process. Here you have two options:
Freehold property ownership: This type of registration basically means the property is has been registered under your name in the Egyptian courts, and can be inherited by family members, even if they have never stepped foot in Egypt. This type of registration is not available in all areas of Egypt, however, especially those areas along the Red Sea coastline.
Signature of Validity (Usufruct): this type of registration refers to a 99-year leasing process which foreigners can obtain if they wish to lease property on the Red Sea coastline, in such places as Hurghada, Sharm elSheikh, Sahl Haseeh, Safaga, and many others. It has also become the most convenient way for foreigners to invest in Egypt – even in areas where freehold purchasing is allowed. This is because they can lease as many properties as they want, then rent them or sell them without any questions asked, as long as all the papers are legally binding.
The cost of both types of registration is 2000.00 EGP no matter what the purchase price is. The time it takes for your property to be registered in either type of registration you and your lawyer decide upon can take from 7 to 12 months once the full purchase price has been paid. If, on the other hand, it is being paid in installments and/or the property is still being developed and is still under construction, the registration process can take even longer. Nonetheless, it is an essential part of the purchase process because it gives you – the buyer – the “green contract”, which proves that all the paper work has been carried out and finalized, and that the purchase price has been paid in full.
This article is part of a series of 8 articles about buying property in Egypt. The other articles in the series cover the following topics:
Egypt has always been a hotspot for investors because of its geographical location, its sunny climate, and its relatively low prices, whether it is the price of the sale itself or the price of the property tax.
It is the country that real estate investors come to when they are looking for an immediate income with long-term capital growth and the freedom of potentially reselling in the future and still making a profit. Egypt’s investment market relies heavily on the success of its tourism industry which has been through ups and downs lately, but has regained its footing once again. Egypt now attracts more overseas property purchases than ever before. This is also a result of the nonexistence of both capital gains tax and inheritance tax which makes the cost of buying very lucrative.
The first thing to do before purchasing property in Egypt is to get a good, qualified international property investment lawyer. Your lawyer will then reserve the property you wish to buy and pay a deposit as a way of finalizing the reservation process. The amount of this deposit depends mainly on the total purchase price.
Even though foreigners can buy property without living in Egypt, yet it will become necessary to enter the country to sign papers, documents, and contracts. The buying prices may be moderate in Egypt, but the process is complicated and may take several months to complete.
Therefore, you will need to apply for an entry visa, which is valid for one year and can be obtained without any hassle via your lawyer. It is one of the easy steps in this entire process. Later on, you can transfer the entry visa into a residency visa which can be for either three years or five, and must be renewed accordingly. Be aware, however, that it will not grant you the right to work, so if you are planning to continue your stay in Egypt, you must obtain a work visa once you have bought your property and established residency. As soon as you have your visa, you will need to fill out a document to give your lawyer power-of-attorney. This document is crucial since the lawyer will need to act on your behalf in the courts of Egypt. The fees for a residency visa are about 150.00 EGP and the power of attorney paper costs about 60.00 EGP.
Next, the seller must provide a property tax statement from the Tax authority to ascertain that the property has undergone a tax assessment. This step is based on the Law no. 114 of 1946 to protect both the buyer and the seller.
After that, the seller will also provide a private purchase contract. This contract must be in Arabic and translated into English. Your lawyer will take the signed contract and present it in an Egyptian court to get the approval of the council of Ministers, which usually takes about two months to obtain.
This approval is necessary for the buyer to proceed with the following steps needed to finalize the sale because it entails a survey of the land by the Egyptian Surveying Authority. It also entails a report drawn up by the Measurement Department. All of these documents are then returned to both the buyer and the seller.
Finalizing the transfer of ownership process requires legalizing all the necessary documents. Both parties must also decide on a method of payment. Some purchasers pay a percentage of the entire purchase price in advance and the remaining on delivery. Others prefer to pay in installments. This is a good option, especially if you are purchasing property that is still being developed because it means you can pay over a period of 3 or 4 years at 0% interest. If you cannot find the means to get a hold of the entire purchase price, then you can look for outside help, as loans or mortgages. You must bear in mind, however, that mortgages are not as common in Egypt as one might think.
Once the full price has been paid, and you have obtained the ownership rights in your name, then your lawyer will begin the registration process. Here you have two options:
Freehold property ownership: This type of registration basically means the property is has been registered under your name in the Egyptian courts, and can be inherited by family members, even if they have never stepped foot in Egypt. This type of registration is not available in all areas of Egypt, however, especially those areas along the Red Sea coastline.
Signature of Validity (Usufruct): this type of registration refers to a 99-year leasing process which foreigners can obtain if they wish to lease property on the Red Sea coastline, in such places as Hurghada, Sharm elSheikh, Sahl Haseeh, Safaga, and many others. It has also become the most convenient way for foreigners to invest in Egypt – even in areas where freehold purchasing is allowed. This is because they can lease as many properties as they want, then rent them or sell them without any questions asked, as long as all the papers are legally binding.
The cost of both types of registration is 2000.00 EGP no matter what the purchase price is. The time it takes for your property to be registered in either type of registration you and your lawyer decide upon can take from 7 to 12 months once the full purchase price has been paid. If, on the other hand, it is being paid in installments and/or the property is still being developed and is still under construction, the registration process can take even longer. Nonetheless, it is an essential part of the purchase process because it gives you – the buyer – the “green contract”, which proves that all the paper work has been carried out and finalized, and that the purchase price has been paid in full.
All types of property for sale in Egypt by private sellers and estate agents. Find your perfect villa, condominium or apartment in Hurghada, Sharm el-Sheikh.
Foreigners can buy property in Egypt. The first thing anyone wishing to purchase property in Egypt must do is find a good lawyer who specializes in
Egyptian property laws. Then they must grant the lawyer power of attorney so the lawyer can act on the buyer’s behalf when legalizing and obtaining
official documents from the Egyptian courts. There are payment options to consider, registration processes, and home insurance.