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Everything you need to know is included in our Egypt Property Pack
Egypt, with its majestic monuments, profound cultural history, and welcoming people, draws in many foreigners looking for real estate investment opportunities.
Nevertheless, understanding the complexities of buying property in a foreign country can be difficult, particularly in terms of the legal framework and regulations that apply.
That is why this guide is here to help! We'll explain how the property market works in Egypt in an easy and straightforward way, covering all you need to know.
Also, for a more in-depth analysis, you can check our property pack for Egypt.Can you purchase and own a property in Egypt as a foreigner?
Buying real estate in Egypt as a foreigner involves navigating a set of rules and regulations that are distinct from those applicable to local citizens.
Here's a comprehensive guide to help you understand the process and requirements.
Foreigners can indeed purchase property in Egypt, but with certain limitations. The primary restriction is on the ownership of agricultural land, which is generally not allowed for non-Egyptians.
However, when it comes to residential properties, commercial properties, or land that is not designated for agriculture, foreigners have more freedom to buy.
The rights of foreign property owners in Egypt are similar to those of local Egyptians, but with a few key differences.
For instance, foreigners are typically allowed to own a maximum of two pieces of real estate, which they must use for a purpose approved by the Egyptian government, like as a residence or for a business.
There aren't usually specific restrictions based on the buyer's country of origin. The rules for property purchase in Egypt are generally uniform for all foreigners, regardless of their nationality.
Owning property in Egypt does not require you to be a resident. Foreigners can buy property even if they don't live in Egypt. This makes it convenient for those looking to invest in Egyptian real estate without the need to relocate.
You don't need a specific visa or permit solely for the purpose of buying property in Egypt.
If you plan to reside in the property you purchase, you'll need to abide by the standard visa and residency regulations that apply to foreigners living in Egypt.
Purchasing property in Egypt does require some governmental intervention.
After selecting a property, you'll need to get clearance from the Council of Ministers, which is a formality to ensure that the property isn't in a restricted area or of strategic importance to the government.
There is’t specific minimum investment requirement for foreigners buying property in Egypt.
Can you become a resident in Egypt by owning a property?
Egypt had introduced a residency-by-investment program, which allows foreigners to gain residency by investing in real estate.
This program is designed to attract foreign investment and is similar to those offered by other countries.
Under this program, purchasing property in Egypt can indeed lead to residency. It's important to understand that this is not automatic citizenship or permanent residency.
The residency granted through this investment is typically temporary but can be renewed as long as the investment conditions are met.
To qualify for this scheme, there is a minimum investment requirement. This amount can vary, but it's usually set at a level that ensures significant investment in the local real estate market. It's essential to check the current requirement, as these figures can change.
The process typically involves selecting and purchasing a qualifying property in Egypt. Once you've made the investment, you would then apply for residency through the appropriate governmental channels.
This process involves providing proof of investment, such as property deeds and financial documentation.
The residency granted under this program is not permanent. It usually lasts for a certain period, often tied to the property ownership. The residency needs to be renewed periodically, and as long as you maintain the investment (i.e., own the property), you should be eligible for renewal.
This investment-based residency does not automatically lead to Egyptian citizenship. Gaining citizenship would require a separate process, typically involving longer-term residency, integration into Egyptian society, and other legal criteria.
The number of people who have used this scheme can vary.
Such programs are often popular among investors looking for a residency option in Egypt, but the exact figures might not be readily available without current data.
Thinking of buying real estate in Egypt?
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Market metrics
You can find fresh and updated data in our pack of documents related to the real estate market in Egypt.
If we look at the the GDP per capita indicator, it seems that Egyptian people have become 12.5% richer over the last 5 years.
The more people become wealthy, the more they will want to buy real estate, which could make prices go up in the future.
The website Numbeo tells us that rental properties in Egypt offer rental yields between 5.5% and 8.2%.
Foreign investors can definitely capitalize on these exceptional rental yields.
To know more, you can also read our dedicated article: is it a good time to buy a property in Egypt?
Daily life of an expat
Living as an expat in Egypt can be an incredibly rewarding experience.
Egypt is a country that is rich in history, culture, and natural beauty. It is also a land of opportunity, with a thriving economy and many business opportunities. The cost of living is relatively low, and the climate is usually warm and sunny. There are also many social activities for expats to enjoy, such as visiting the world-famous pyramids or exploring the ancient ruins of Luxor.
In addition, Egypt is home to some of the best cuisine in the world, with its flavorful local dishes and culinary specialties. Expats will find plenty of modern amenities in the cities, as well as a good selection of international schools and universities.
All in all, living in Egypt can be an enjoyable and fulfilling experience.
What are the best places to purchase a property in Egypt?
This table summarizes some of the best places to buy a property in Egypt.
| City / Region | Population | Average Price per sqm (EGP) | Strengths |
|---|---|---|---|
| Cairo | ≈ 9.5 million | 8,000 - 20,000 | Capital city, cultural and historical sites, business opportunities |
| Alexandria | ≈ 5 million | 10,000 - 25,000 | Coastal city, Mediterranean Sea, historic landmarks, cultural heritage |
| Sharm El Sheikh | ≈ 100,000 | 12,000 - 30,000 | Tourist destination, Red Sea beaches, diving and water sports |
| Hurghada | ≈ 400,000 | 8,000 - 20,000 | Red Sea resort town, pristine beaches, water activities, resorts |
| Luxor | ≈ 500,000 | 10,000 - 25,000 | Ancient city, UNESCO World Heritage Sites, historic temples |
| Aswan | ≈ 300,000 | 8,000 - 20,000 | Nile River, historic sites, Nubian culture, peaceful atmosphere |
| Ain Sokhna | ≈ 40,000 | 12,000 - 30,000 | Red Sea coastal town, beach resorts, proximity to Cairo |
Do you need a lawyer to buy a property in Egypt?
When purchasing a property in Egypt, engaging a local lawyer can be essential to navigate the legal requirements and ensure a successful transaction.
One crucial document they can assist with is the Sale Contract, a legally binding contract between the buyer and seller that outlines the terms and conditions of the sale.
The Egyptian lawyer can also help with conducting a Property Title Search to verify the property's ownership status and identify any potential legal issues or encumbrances.
Moreover, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local municipality or relevant authorities.
They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in compliance with Egyptian laws and regulations.
What are the risks when buying real estate in Egypt?
We've got an article dedicated to the risks associated with purchasing property in Egypt.
The political and economic instability in Egypt can be a major risk when buying a property in the country.
Egypt has seen numerous political and economic crises over the past few decades, and the situation can change drastically in a short period of time. This means that the value of the property may decrease or become otherwise difficult to manage.
Another risk is the lack of legal protection for foreign property buyers. In Egypt, foreign buyers are not protected by the same laws as domestic buyers. This means that foreign buyers may not be able to enforce their rights if they encounter a dispute in the future.
The lack of transparency in the real estate sector can also be a major risk. In Egypt, there is no public registry of property owners, and transactions are often conducted in an opaque manner. This can make it difficult to verify the ownership of a property or to ensure that the transaction is fair and above board.
Finally, there is the risk of fraud. In Egypt, there have been numerous cases of fraud involving property buyers, ranging from forged documents to outright theft. It is important to be aware of the risks and to take steps to protect oneself when buying a property in Egypt.
Everything you need to know is included in our Egypt Property Pack
What is the list of documents needed for a real estate transaction in Egypt?
When buying a property in Egypt, the documents needed include:
1. A valid identification document, such as a passport or national identity card.
2. A power of attorney, if applicable.
3. An official document to show ownership of the property.
4. A contract of sale.
5. Tax documents, such as a real estate tax certificate.
6. A deed of transfer.
7. A bank guarantee.
8. A certificate of occupancy.
We review each of these documents and tell you how to use them in our property pack for Egypt.
What are the tips for negotiating with Egyptian people effectively?
When buying a property in Egypt, here is what you can do to improve the negotiation phase:
- Show respect for local customs and traditions by starting negotiations with a friendly conversation over tea, allowing time for personal rapport to develop.
- Incorporate haggling into the negotiation process, as it is a common practice in Egyptian culture. Be prepared for counteroffers and be willing to negotiate on price and terms.
- Seek assistance from a trusted local intermediary who understands the nuances of the Egyptian property market and can provide cultural insights during negotiations.
- Understand the importance of building trust and maintaining a positive relationship throughout negotiations, as Egyptians prioritize trust and personal connections in business dealings.
- Familiarize yourself with the legal and regulatory framework surrounding property transactions in Egypt to ensure compliance and avoid potential pitfalls during negotiations.
Can foreigners obtain a bank loan in Egypt?
Yes, foreigners can obtain property loans in Egypt. The Egyptian banking system allows non-residents to apply for property loans, subject to certain conditions and requirements.
Foreigners looking to obtain a property loan in Egypt generally need a valid residence permit, proof of income or employment, and must meet the specific criteria set by the lending institutions in the country.
Some banks in Egypt that can grant mortgages to foreigners include Commercial International Bank (CIB), National Bank of Egypt (NBE), and Banque Misr.
However, it's useful to know that mortgage rates in Egypt for a 20-year term range between 11% and 15%, making it difficult for borrowers to access affordable funds. As a foreigner, you should seek other financing options for a smoother borrowing experience.
What are the taxes related to a property transaction in Egypt?
Here is a breakdown of taxes related to a property transaction in Egypt.
| Tax | Description | Calculation | Who pays |
|---|---|---|---|
| Real Estate Transfer Tax | Tax on the sale of property | 2.5% of the property's value or the sale price, whichever is higher | Seller |
| Real Estate Tax | Annual tax on the property's value if it is not the owner's main residence | 10% of the annual rental value, after deducting 30% housing expenses and 32% for non-housing | Owner |
| Stamp Duty | Tax for stamping the property transfer documents | 0.3% of the gross transaction value without deducting any costs | Seller and Buyer |
For a more detailed calculation, refer to:
- the Andersen Egypt's website
- the Real Estate Tax Authority, Egypt's website
What fees are involved in a property transaction in Egypt?
Below is a simple breakdown of fees for a property transaction in Egypt.
| Fee | Description | Calculation | Who pays |
|---|---|---|---|
| Registration Fee | Fee for registering the property with the Real Estate Registry | Varies depending on the size of the property and cannot exceed 2,000 EGP | Buyer |
| Notary Fees | Fees for notarizing property-related documents | 3% of property value or flat fee determined by the notary public | Buyer |
| Legal Fees | Fees for legal assistance in the property transfer process | Varies depending on the agreement between the buyer and the lawyer | Buyer |
| Real Estate Agent Fee | Commission fee for real estate agent services | Typically 2% to 3% of the property's sale price | Seller |
-Buying property as a foreigner in the UAE: the guide
Buying real estate in Egypt can be risky
An increasing number of foreign investors are showing interest in Egypt. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.