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Buy house or flat in Cairo


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Expats Buying Real Estate

Foreigners can purchase property in Egypt, but cannot register more than two pieces of real estate which cannot exceed 4,000 square meters (sq. m.) and may only have residential purpose. The purchase sum must be brought into Egypt in foreign exchange.

The property cannot be sold or rented for the first five years. If the property is rented out after this period, property owned by a foreigner must be rented furnished.

Laws

The ownership of land by foreigners is governed by three laws: Law No. 15 of 1963, Law No. 143 of 1981 and Law No. 230 of 1996.

Law No. 15 of 1963
Provides that no foreigners, whether natural or legal persons, may acquire agricultural land.

Law No. 143 of 1981
Governs the acquisition and ownership of desert land. Certain limits are placed on the number of feddans (one feddan is equal to approximately one hectare) that may be owned by individuals, families, co-operatives, partnerships and corporations. Partnerships are permitted to own 10,000 feddans, provided that the individual shall not own more then 150 feddans. Joint stock companies are permitted to own 50,000 feddans. The lease of such land for more than a period of 50 years shall also be considered to be ownership under Law 143.

Law No. 230 of 1996
This law allows non-Egyptians to own real estate whether built or vacant with the following conditions:

  • That ownership be limited to only two real estate properties throughout Egypt for accommodation purposes of the person and his family (family meaning spouses and minors), in addition to the right to own real estate needed for activities licensed by the Egyptian Government.
  • That the area of each real estate not be in excess of four thousand square meters.
  • That the real estate is not a historical site.
  • Exemption from first and second conditions is subject to the approval of the Prime Minister. Ownership in tourist areas and new
  • communities is subject to conditions established by the Cabinet of Ministers
  • Non-Egyptians owning vacant real estate in Egypt must build within a period of five years from the date their ownership is effective (the date on which the realty is recorded at the competent Notary Public Office). Non-Egyptians may only sell their real estate five years after registration of ownership, unless the consent of the Prime Minister is obtained.

How to Search for Real Estate

You should first determine what exactly you are looking for.

  • What's your price range?
  • Where do you want to live?
  • Do you want to live in a house or a flat?
  • How many rooms do you need?
  • Would you prefer a modern home, or something traditional?
  • Do you require certain amenities like a gym, doormen, etc?
  • Do you have pets?

Online Listing

Online listings can give you a feel for the market and allow you to determine if a place fits your specifications before you spend time going to look at it.

Estate Agent

In Egypt people will often use a semsarr (apartment agent or finder). Once you find a semsarr, tell them what type of flat you require, the area you wish to live in, your budget range, and as many details as possible. A good agent knows the legal pitfalls and has access to a variety of housing and they can show you flats immediately. Semsarr receive a commission from the landlord, and you are not required to pay them unless they find a suitable flat. There is also no problem using the services of several semsarrs. It is advisable that you approach only reputable companies to help in your search for a home.

While viewing apartments with an agent, be sure to ask to see a wide range of housing options. As a foreigner, many agents assume that you want a lavish or expensive apartment, or the landlord may be asking for more than the actual value of the apartment. Be sure to do your research ahead of time by asking your fellow expats in Cairo how much their rent is, and remember there are always options for every budget. If your agent won't show you them, find a new agent.

Networking & Public Postings

Egypt is a country where networking will provide you with some of your best options. Spread the word that you are looking and ask friends, neighbors, and contacts if they know of available properties.

Expat and social forums and classified's are another resource for apartment seekers. You can get a realistic expectations of what it's like to live in Cairo as well as make helpful contacts. Check out Easy Expat's Egypt forum and network to connect with expats there.

Process of Sale

Once you have found a home you want to purchase, you will be required to pay a holding deposit of 10 percent of the purchase price. . You must also ensure the property is truly available for purchase.
First, have a solicitor check the registration status of the property. This can take up to four months as title deeds are examined. This is a difficult step in which only 10 percent of Egyptian homes fulfill this requirement.
Second, the lawyer needs to find out if there are any outstanding debts registered against the property.
Third, ensure that all real estate taxes levied against the property are fully paid and up-to-date
Fourth, review and sign the sales contract. Be aware that this contract is not legally binding unless it is bilingual.
The final step is to register the purchase through the courts. This process costs in excess of 500 euros.

Mortgage

The mortgage industry in Egypt is still very new. The purchase sum must be brought into Egypt in foreign exchange, through one of the public commercial banks (though this provision of the law is not enforced). Many Foreigners prefer to finance purchases in their home country. Some Egyptian developers now provide loans in order to encourage you to buy their particular properties, but these tend to be over a limited period of time.

Larger Egyptian banks will provide a loan, but these are usually at a considerably high rate and only for a short period. Some western banks based in Egypt may also be an option, but these are unfortunately uncommon.

Registering Property

To register property, the total payable is under 3 percent registration fee at LE 2,000 (regardless of the purchase price of the property). The process still takes approximately 72 days.

    To register:
  • Request for registration presented by the buyer.
  • Site inspection by the measurement department.
  • Payment and issuance of the inspector's report (maqbul).
  • Final contract is drafted and approved at the Lawyers Syndicate.
  • The buyer obtains the contract from the real estate registry.
  • Seller and buyer sign the contract before the real estate registrar.
  • The buyer picks-up the new contract/title at the real estate registry.

Fees

Legal Fees: The highly complex purchasing process makes for high legal fees. Legal documents written in Arabic are the only ones recognized in courts. Legal fees usually amount to about 3 percent of property value.

Real Estate Agent's Fees: Real estate agent fees are around 2.5 from 3 percent. There is also a 10 percent sales tax which is paid by the seller.

Transfer Tax: Sale or transfer of immovable property is subject to transfer tax, 2.5 percent.

Capital Gains Tax: A Capital Gains Tax is charged on gross gains and is classified as a transaction cost. Capital Gains Tax is imposed on the sale of land and buildings within the boundaries of an Egyptian city at the rate of 2.5 percent of gross gains of the seller.

Investment

When buying property as an investment, you must be certain that you can afford to buy and hold the investment over the long term as there are costs and risks involved in disposal and acquisition. Get independent advice and proceed with caution.

Auction

Buying at auction is very exciting and can offer you a significant savings. Note that most properties are sold cheaply, but may need extensive renovation. This option is not recommended for first time buyers, and even experienced buyers should bring a friend or advisor as a second opinion.


Update 4/12/2011



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