What every home buyer should know before investing in Egypt:
According to the Prime minister declaration Number 548 dated 5 April
2005 there is no property ownership for foreigners in the Sharm El Sheikh
area. It is a 99 years lease hold and enforced. For verification you
can contact us for appropriate documentation.
Process for registration of 99 years lease hold at El Tur city (3 to
6 months):
1-Present the documents at the register office at El Tur City.
2-The register office sends the documents to Cairo central registration
office for foreigners
3-After verification they send the documents back to El Tur City.
4-Documents are stamped.
El Tur city is located 60 miles from Sharm El Sheikh.
Advantages of buying property in Sharm El Sheikh:
- Tax breaks (no stamp duty)
- No capital gain tax on resale
- No sales tax
- Low death succession duty 7% (to transfer property ownership)
- Tax benefits (extremely low taxes)
- Banks: easy to open accounts and to transfer funds
- 0% tax on bank interest.
There are 3 types of registration in El Tur city and all of them will
give you a blue/green stamped document:
- Preliminary sale contract can not be registered for foreigners
buying properties in Sharm El Sheikh.
- Contact validity which proves ownership like registration
for Egyptians and can be done for 99 years lease hold.
- Signature validity which does not grant ownership but grants
validity of the signatures on the document and it is a form of legal
protection (which is commonly used for foreigners).
Frequently asked questions about buying a property in Egypt:
1-What are the potential problems of buying property in Egypt?
The property registry in Egypt is out of date and incomplete, and many
believe that only 10% of the properties in Egypt are actually registered.
Naturally this can create a problem for the property investor. However
resorts like Sharm El Sheikh are far more geared up to the international
property market. Further more, those considering investing in property
in Sharm El Sheikh would be wise to do so through an established and
reputable estate agent.
2-Will I need a local lawyer?
In a country where real estate registration issues are as complex as
in Egypt, it is really critical to have a lawyer conduct search and
to advise on the legality of the purchase, even if you are buying a
brand new property from a well established developer, who can register
only after the project is completely built through a document called
Dedication Resolution (Karar Takhsees).
3- Will I be able to mortgage?
Local mortgages are almost impossible to obtain, so you will need to
fund the purchases yourself or via same country mortgage. All the Off
Plan properties with strong reputable developers are INTEREST FREE and
financed for a minimum average 3 years.
NEW DECREE
For Egyptians 99 years Usufruct right (Lease hold) in Sharm El Sheikh and Sinai
Prime Minister's Decree number (350) of 2007
The Prime Minister
After perusing the constitution and perusing:
Law no. 143 of 1981 concerning desert lands;
Law no. 7 of 1991 concerning the state private properties;
Law no. 4 of 1994 concerning environment protection;
Law no. 230 of 1996 concerning regulation of foreigners' ownership for built properties and empty land plots;
Law no. 94 of 2005 concerning amending some regulations for joint stock companies, limited partnership stock companies, and limited liability companies, originally stipulated in law no. 159 of 1981, and law of investment guarantees and incentives originally stipulated in law no. 8 of 1997;
President's Decree no. 560 of 1986, concerning securing the neighbouring area to the western borders of Egypt;
President's Decree no. 413 of 1988 concerning securing the neighbouring area to the southern borders of Egypt, amended by president's decree no.99 of 1999;
President's Decree no. 152 of 2001, concerning securing the eastern borders of Egypt;
President's Decree no. 152 of 2001 concerning fixation of strategic desert areas with military importance;
President's Decree no. 153 of 2001 concerning establishment of The National Institution for Planning the State's Lands Usage;
President's Decree no. 154 of 2001 concerning fixation of state lands usage until 2017;
Prime Minister's Decree no. 731 of 2004 entitling the military landscape department to prepare the required database for land plots needed for the various activities of the ministries concerned, among the map of investment opportunities;
Prime Minister's Decree no. 548 of 2005 concerning foreigners' rights of freehold and usufruct in certain areas of Egypt;
Defence and Military Production Minister's Decree no. 146 of 2002 elucidating the terms and conditions required for the state defence in desert areas, concerning institutions stipulated in law no. 143 of 1981, and law no. 7 of 1991;
HAS DECIDED
Article (1)
With no violation to legal acts which have taken place before the enforceability of law no. 94 of 205 abovementioned, companies and institutions preserve the right to own land plots and properties needed for either establishing their activities, or elaboration of the said activities. This is regardless of the nationalities of partners and contributors, their locations, their percentages of partnership, and their contribution to the capital, EXCEPT FOR THE LAND PLOTS AND PROPERTIES SPECIFIED IN ARTICLES (2) AND (3).
Article (2)
Companies and institutions are NOT GRANTED, neither the freehold right nor the usufruct right on land plots and properties in the following zones:
1- Strategic zones with military significance specified in President's Decree no. 152 of 2001 based on law no. 7 of 1991 aforementioned in the preamble.
2- Neighbouring zones to the areas used to secure the state international borders of Egypt:
A- Western borders according to the President's Decree no. 560 of 1986.
B- Southern borders according to the President's Decree no. 413 of 1988.
C- Eastern borders according to the President's Decree no. 298 of 1995
3- Islands of the Mediterranean Sea and of the Red Sea.
4- Archaeological (Monumental) zones and their security zones.
5- Natural Protected Areas.
6- Red Sea campus, Mediterranean Sea campus, and Suez Canal campus, according to environment law no. 4 of 1994 abovementioned.
7- Roads of all types and campuses of these roads, according to the roads law no. 84 of 1968 abovementioned.
Article (3)
Companies and institutions are not granted the freehold right on land plots and properties in Sinai Peninsula, and these land plots and properties included in the geographical zone of Suez Governorate, Ismailia Governorate, and Port Said Governorate.
Article (4)
Except for the land plots aforementioned in Article (2), companies and institutions can utilize the land plots and properties in Sinai Peninsula by means of USUFRUCT ONLY, and according to the following terms and conditions:
1- Articulation of a limited period usufruct contract (One year – 99 years) between the usufructuary and the institution owning the land, according to the activity. This usufruct period is renewable upon agreement between the usufructuary and the landlord.
2- Before obtaining the dedication resolution, and before concluding the usufruct contract, the usufructuary must obtain the needed approvals from (Ministry of Defence – Ministry of Internal Affairs "Police" – National Security Institution – The concerned governorate).
3- After the usufruct period is finished, the land plot subject of usufruct, and the establishments built on them get automatically transferred to the original landlord.
Article (4)
The state utilities and institutions, each to their realm of concern, shall implement this decree with coordination between them and the competent authorities.
Article (5)
This resolution is effective since the day of publishing it in the official newspaper. This decree nullifies any other decree which is non compliant to its terms and conditions.
PRIME MINISTER
Dr. Ahmad Nazeef
Please contact us for any inquiries rearding legal
issues.
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