House Buying Guide Egypt
Dalia, Friday, 8 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:
Buying and selling property in Egypt is an accessible transaction to anyone from anywhere in the world according to the Egyptian Law No. 230 of the year 1996. And just like any purchasing procedure, it requires a few steps, some taking longer than others, and it definitely requires a little know- how of Egyptian Property Law.
Anyone who is not of Egyptian decent and wishes to buy property in Egypt may do so through a good lawyer who has sufficient experience and expertise on the purchasing procedures. Acquiring a lawyer usually requires a deposit which mainly depends on the law firm as well as the type of property being sought out. Then the buyer needs to reserve the property he or she wishes to purchase with a reservation deposit which depends on the actual purchase price. The next step would be a drawing up a private purchase contract which should be in both Arabic and English. This should be done by the seller. The next step would be to obtain the approval of the council of Ministers. This step usually takes about two months to finalize.
Foreigners will also need to apply for a residency Entry Visa. This is because owning property in Egypt does not automatically give the owner residency. You can apply for this visa after entering Egypt on a tourist visa. These visas are valid for one year and they are helpful in the purchase process since you will need to sign documents, perform legal actions for your property, and complete the registration process since you need to give the lawyer whom you have retained the power of attorney, and this must be done in person. This power means your lawyer has the legal right to go to court on your behalf in order to complete the registration process of the property you wish to purchase. This residency visa, however, does not entitle you to work in Egypt. The fees for a residency visa are about 150.00 EGP and the power of attorney paper costs about 60.00 EGP. The following step is legalizing and completing the ownership documents as well as deciding on a payment method. Local mortgages are pretty hard to get a hold of in Egypt. You may find mortgage payment assistance from your home country, and if not, you have the choice of paying the full purchase price which can get you a decent discount of about 5%. You also have the choice of paying in installments, sometimes at 0% interest over a 3 or 4- year period.
As soon as the property’s full price has been paid, and you have signed the final sale contract with the owner of the property, then comes the paper work. This refers to the ownership documents which must be legally valid. After that, the final step is the transfer of ownership rights from the seller name to your name.
As soon as your lawyer has the power of attorney to act on your behalf, the registration process will shortly ensue. This process can go in two different directions. One option you can opt for is the registration process for freehold property which is limited to certain areas in Egypt. The second is a process called Signature of Validity. The cost of the registration process is 2000.00 EGP no matter what the purchase price is. There are pros and cons to each, but registering your property at an Egyptian court of law will give you the security you need as a property owner under Egyptian law. They both grant you the “green contract” which is a contract granted to the buyer by a court once the purchase price has been paid in full and registered.
The prior option allows the purchasing of property in areas of Egypt where foreigners can buy freehold which means they can buy, sell or rent their property without any interference from the government as long as all their paper work is in order. The latter option is referred to as leasehold because in certain places in Egypt, such as South Sinai, foreigners and even Egyptians with a dual nationality are not allowed purchase property freehold. Instead, they can only buy a 99-year lease on the land. This lease purchase can only be accomplished through the registration process called Signature of validity. This method of purchasing a lease instead of the property itself has actually become the more popular of the two registration processes. This is because it gives the foreigner to buy as many properties as he or she likes. It also gives them the freedom to rent or sell these properties with ease and no complications. It can also be used anywhere in Egypt, even in the areas where foreigners can purchase property freehold.
Registering your property, however, may take anywhere from 7 to 12months and that is only if all the documents have been signed and legally verified, and the full purchase price has been paid. On the other hand, if the property is being paid for in installments, or if the property is still under construction, it may take even longer. In the latter case, the buyer usually pays around 40% of the purchase price in advance and the rest in installments until the property is finished and ready to be delivered to the buyer.
As of 2008, a real estate law No.196 states that the buyer must pay an annual property tax at a rate of 10% of the annual rental value of the property. However, this only applies to property whose market value exceeds 500,000 EGP. Any property which has a market value less than that does not have to pay this annual property tax.
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:
Buying and selling property in Egypt is an accessible transaction to anyone from anywhere in the world according to the Egyptian Law No. 230 of the year 1996. And just like any purchasing procedure, it requires a few steps, some taking longer than others, and it definitely requires a little know- how of Egyptian Property Law.
Anyone who is not of Egyptian decent and wishes to buy property in Egypt may do so through a good lawyer who has sufficient experience and expertise on the purchasing procedures. Acquiring a lawyer usually requires a deposit which mainly depends on the law firm as well as the type of property being sought out. Then the buyer needs to reserve the property he or she wishes to purchase with a reservation deposit which depends on the actual purchase price. The next step would be a drawing up a private purchase contract which should be in both Arabic and English. This should be done by the seller. The next step would be to obtain the approval of the council of Ministers. This step usually takes about two months to finalize.
Foreigners will also need to apply for a residency Entry Visa. This is because owning property in Egypt does not automatically give the owner residency. You can apply for this visa after entering Egypt on a tourist visa. These visas are valid for one year and they are helpful in the purchase process since you will need to sign documents, perform legal actions for your property, and complete the registration process since you need to give the lawyer whom you have retained the power of attorney, and this must be done in person. This power means your lawyer has the legal right to go to court on your behalf in order to complete the registration process of the property you wish to purchase. This residency visa, however, does not entitle you to work in Egypt. The fees for a residency visa are about 150.00 EGP and the power of attorney paper costs about 60.00 EGP. The following step is legalizing and completing the ownership documents as well as deciding on a payment method. Local mortgages are pretty hard to get a hold of in Egypt. You may find mortgage payment assistance from your home country, and if not, you have the choice of paying the full purchase price which can get you a decent discount of about 5%. You also have the choice of paying in installments, sometimes at 0% interest over a 3 or 4- year period.
As soon as the property’s full price has been paid, and you have signed the final sale contract with the owner of the property, then comes the paper work. This refers to the ownership documents which must be legally valid. After that, the final step is the transfer of ownership rights from the seller name to your name.
As soon as your lawyer has the power of attorney to act on your behalf, the registration process will shortly ensue. This process can go in two different directions. One option you can opt for is the registration process for freehold property which is limited to certain areas in Egypt. The second is a process called Signature of Validity. The cost of the registration process is 2000.00 EGP no matter what the purchase price is. There are pros and cons to each, but registering your property at an Egyptian court of law will give you the security you need as a property owner under Egyptian law. They both grant you the “green contract” which is a contract granted to the buyer by a court once the purchase price has been paid in full and registered.
The prior option allows the purchasing of property in areas of Egypt where foreigners can buy freehold which means they can buy, sell or rent their property without any interference from the government as long as all their paper work is in order. The latter option is referred to as leasehold because in certain places in Egypt, such as South Sinai, foreigners and even Egyptians with a dual nationality are not allowed purchase property freehold. Instead, they can only buy a 99-year lease on the land. This lease purchase can only be accomplished through the registration process called Signature of validity. This method of purchasing a lease instead of the property itself has actually become the more popular of the two registration processes. This is because it gives the foreigner to buy as many properties as he or she likes. It also gives them the freedom to rent or sell these properties with ease and no complications. It can also be used anywhere in Egypt, even in the areas where foreigners can purchase property freehold.
Registering your property, however, may take anywhere from 7 to 12months and that is only if all the documents have been signed and legally verified, and the full purchase price has been paid. On the other hand, if the property is being paid for in installments, or if the property is still under construction, it may take even longer. In the latter case, the buyer usually pays around 40% of the purchase price in advance and the rest in installments until the property is finished and ready to be delivered to the buyer.
As of 2008, a real estate law No.196 states that the buyer must pay an annual property tax at a rate of 10% of the annual rental value of the property. However, this only applies to property whose market value exceeds 500,000 EGP. Any property which has a market value less than that does not have to pay this annual property tax.
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.
Even though mortgage financing was introduced to the Egyptian market in 2001, it has not yet truly shown its true potential. This is mainly due to the
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