PURCHASE PROCEDURE IN EGYPT

Purchase procedure for buying property in Egypt The Egyptian legal system is very different from the British. However, provided that the appropriate procedures are followed and precautions are taken, buying a property in Egypt is quite safe. First of all choose a reputable estate agent, one used to dealing with international property and one which can provide comprehensive and understandable information about the property you are thinking of buying. This is at the heart of the Prime way of doing business. If you decide to purchase, you will sign a simple reservation contract in Egypt, which reserves your property for you. A reservation contract takes the property off the market for around two to four weeks, during which time your lawyer can make all the necessary checks on the property.

You pay a reservation deposit of, typically, £2,000/€3,000. During this period, your lawyer needs to make the necessary checks on the property but s/he also needs to deal with the key issue of who should become the legal owner of the property. After all the necessary checks have been carried out and providing you are satisfied, you then sign the preliminary contract and, usually, pay over a deposit of 10% of the price (on a resale property) or a down-payment of, perhaps, 30% (on a new or 'off plan' property). In the case of a new property, bought 'off plan', there then usually follows a series of stage payments as the construction process progresses. Once the property has been finished (or, in the case of a resale property, as soon as everyone is ready to proceed), your lawyer will arrange for payment of the taxes on your behalf and the Final Contract of Sale/Title Deed is signed. This is the document transferring the right to ownership to you.

The notary will then arrange for this to be registered at the Land Registry. In the case of a new property, a licence to occupy the property as a dwelling is issued by the Egyptian authorities. The whole process will, in the case of a resale property with no mortgage, typically take about 16 weeks. In the case of a property under construction, the pace is usually determined by the speed of construction – typically, perhaps, 18 months.

Buying Procedures in Egypt

Who can buy property in Egypt?
Foreign purchasers have the right to purchase both real estate and land in Egypt. The government recognizes the impact that foreign investment in property can have on the economy and have set about actively encouraging overseas buyers to Egypt. New laws have been established to make the Egyptian property purchase procedure more secure.
What is the process?

Lawyers in Egypt will normally speak English and will be able to produce your necessary paperwork in Arabic, as required by all the authorities. Egypt has many complex real estate registration issues so it is critical to have a lawyer conduct the appropriate searches and provide you with legal advice regarding the purchase.

Most Egyptian properties are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer's assistance in liaising with the Real Estate Registration Office in Egypt is essential in order to ensure the property is duly registered and prepared for foreign purchase. Registration can take up to four months. After inspections and payment of taxes/fees, you will finally obtain a new title from the Registry.

Contracts of sale are drawn up and notarised, at which time a deposit is payable (normally 10%), and a completion date is set. In many cases, the purchaser can return home leaving a power of attorney with their solicitor, who can then complete the purchase.

Costs of buying property in Egypt

How much are legal fees?
The registration fees are normally 3% of the purchase price and legal fees are typically the same. We have special arrangements with UK and local lawyers for our members. Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).

What are connection fees?
New properties are connected to electricity, telephone and water supplies on the completion of the development and the utility companies charge each property an amount based on the cost of connecting the development. The cost varies depending on the area and the distance from the nearest supply but is rarely more than £500 in total.

Are there any service charges?
Most new developments of villas or apartments that have communal facilities now arrange maintenance and will charge an annual service charge.

Selling Costs
There are no government restrictions on selling your property.

Running Costs
• Annual Municipal Taxes are normally less than £100 p.a.
• Electricity supply is 240 volts AC 50Hz. The power supply is subject to disruption and we can supply back up generators or UPS systems on request.
• Water is by mains supply and in some properties supplemented by wells. Water is stored in your tank which should be large enough for three days supply as some areas are only refilled every other day. Water is normally potable and can also be purchased via tanker.
• Drainage is via individual septic tanks which require servicing every 18-24 months at a typical cost of £25.
• Telephone lines can take several months to be connected but do provide International direct dialling. Internet connections are relatively cheap at no more than £10 p.m. Broadband is available by satellite but is expensive at present.
• Satellite (including Sky) TV is available.
• Mobile phones have extensive coverage in Egypt and are relatively cheap.

Taxes

Tax on any form of income from property runs at 20 to 22% and is basically the alternative to Value Added Tax. Many countries enjoy a double taxation treaty with Egypt. Egypt levies no inheritance or capital gains taxes.