Egypt straddles the Mediterranean and Red Seas, linking Africa, Europe, the Middle East and south Asia. Four times the size of the UK, it has borders with Libya, Sudan, the Gaza Strip, Israel and Jordan, and faces Saudi Arabia across the Gulf of Aqaba.
The strategically important Suez Canal is to the north, running between Suez and Port Said, while the Red Sea tourist resort of Sharm al-Skeikh is in the far south.Much of the country in between is desert and only 4 per cent of the land is cultivated, mainly adjacent to the 1,000 mile long Nile and the Nile Delta.Egypt is hot and dry in the summer, mild in the winter with rainfall increasing nearer the coastlines.Temperatures increase southwards, and on average, these vary between 22 and 37 degrees Centigrade in the summer and 9 and 19 degrees Centigrade in the winter.British visitors require visas. These can be obtained from an Egyptian Consulate outside Egypt or on arrival for stays of up to a month. Applications for visa extensions should be made at Egyptian Passport and Immigration Offices. British and other EU nationals travelling to Sharm El Sheikh or Taba resorts for up to 14 days do not require a visa prior to travel – they will receive an entry permission stamp upon arrival. However, foreign property owners in Egyptian must have residence.
Foreigners cannot register more than two pieces of real estate, which cannot exceed 4,000 square metres (sq. m.), and their purpose must be for a family member to live in. The property cannot be sold or rented for the first five years. The purchase sum must be brought into Egypt in foreign exchange. When ultimately rented, property owned by a foreigner must be rented furnished, which has very major tax disadvantages.
Property transaction costs are around 10.85% to 12.3%; mostly consisting of the real estate agent’s fee (2.5% to 3% plus 10% sales tax), legal fees (3%), transfer tax (2.5%) and capital gains tax (2.5%). Investors should be cautious of the complex ownership and registration process; e.g., only around 10% of properties in Cairo are registered and there are numerous foreign-ownership restrictions.
According to the Foreign Office, some of the British nationals who have purchased land in Egypt have encountered problems. In parts of Egypt and increasingly, in the area of the West Bank in Luxor, land tenure rights can be restricted by local legislation. ‘If you intend to purchase a property in Egypt we strongly advise you to engage a local lawyer’, says the Foreign Office ‘It is important that your lawyer obtains an extract from the local land registry to satisfy you that the property or land in question is formally registered. You should again seek legal advice before entering into any contract. Don’t sign anything that you do not understand’. A list of English speaking lawyers and of translators is available from the British Embassy in Cairo.
Special rules apply, however, in Sharm el Sheikh which limited property rights to a maximum of 99 years. In other areas of Egypt it is still possible to buy freehold properties.
Rental income earned by residents is taxed at progressive income tax rates. The maximum deduction allowed to cover operating expenses is 50% of the gross rent. There is no capital gains tax, but for properties located in the Egyptian cities, a flat rate of 2.5% of the gross proceeds is levied on sales of real estate or building sites. No deductions are allowed. Inheritance tax was abolished in Egypt in 1996.
Although the real estate market seems relatively unscathed by the revolution, great care needs to be taken as, with the exception of the Red Sea tourist resorts, Egypt remains extremely volatile in 2013.
Area: 1,001, 450 square km
Principal cities: Cairo, Port Said, Alexandria, Suez, Damietta
Median age of population: 24.2
Language: Arabic Employment rate: 89.7%
Flying time from UK: 4.31 hours
Currency: 1 Egyptian Pound = 100 piastres
Time difference from UK: +2 hour
Rate of inflation: 6.3%
International dialling code: 0020
GDP per person: $2,781
Climate: Hot dry summers, moderate winters