The cabinet approved two draft laws amending some provisions of the Real Estate Registration Law No. 114 of 1946, and the Income Tax Law promulgated by Law No. 91 of 2005, Invest-Gate reports.

The amendments aim to facilitate property registration procedures through several steps, including separating tax payment from registration procedures and fees, with the possibility of registration despite the absence of a sequence of registered property in several cases, a statement by the cabinet reveals.

The registration cases come as follows:

• First, if the registration applicant has a valid document along with five years of possession and good faith.
• Second, the presence of a final ruling on ownership or other real rights in kind.
• Third, seizure of possession for a period of more than 15 years with the intention of ownership, with the real estate registry realization of the interest of the real estate registry from that.

As regards amending the provisions of the Income Tax Law, Article 42 indicates that the lump-sum tax will be imposed on the last seller only, regardless of the number of contracts. Besides, the lump-sum tax period will be imposed on contracts made prior to the enforcement of Law No. 11 of 2013.

Additionally, the value of the lump-sum tax is determined according to the segments related to the value of the disposal, as follows:

• If the contract value is up to EGP 250,000, the tax value will be EGP 1,500.
• If the value of the contract is more than EGP 250,000 up to EGP 500,000, the tax value will be EGP 2,000.
• If the value of the contract is more than EGP 500,000 and up to EGP 1 mn, the value of the tax will be EGP 3,000.
• If the value of the contract is more than EGP 1 mn, the tax will be EGP 4,000, without delay penalties.

According to the decision, there is no link between the payment of real estate tax and the registration procedures in the real estate registry or its connection with the entry of any facilities to the real estate.

The Egyptian Tax Authority will also follow up on the collection of the real estate tax, from the legally mandated seller, without referring to the buyer, unless the buyer voluntarily applies to pay this tax.

It’s noteworthy that the real estate transaction tax is scheduled to apply 2.5% during the working period of Law No. 11 of 2013, amending the Income Tax Law, and in accordance with Law No. 5 of 2021, issued on 3/06/2021, amending the text of Article 42 of the Income Tax Law, after deleting the two paragraphs related to the collection of the real estate tax by publicity, or by inserting utilities on the property.