03‏/05‏/2025

Real estate wealth tax.. How is it calculated on apartments and what is the penalty for evasion?

The Tax Authority has reiterated its request to the owners or beneficiaries of real estate in the recent period, if they rent it, whether a fixed-term lease or a furnished lease, to notify the competent tax inspectorate within thirty days from the date of the lease.

The Unified Tax Procedures Law No. (206) of 2020 stipulates that every owner or usufructuary of a property is obligated, in the event that he rents it, whether a fixed-term lease or a furnished lease, to notify the competent tax inspectorate within thirty days from the date of the lease.

And the authority calculates that failure to open a tax file for this activity, and failure to report the revenues resulting from leasing and declaring them in the annual income tax return is a form of tax evasion, and leads to the application of the penalties contained in the provisions of the Unified Tax Procedures Law No. (206) for the year 2020.

Units covered by the real estate wealth tax. The law applies to any residential unit, summer vacation unit, or place that is rented, whether a fixed-term rental or a furnished rental.

According to Income Tax Law No. (91) of 2005, when calculating the tax on real estate wealth revenues, 50% of revenues are calculated against costs and expenses, which is a ruling percentage, while the tax rate is progressive and starts from 2.5% to 27.5% according to the level of the net segments. profit

Old tax Rajab Mahrous, advisor to the head of the Egyptian Tax Authority, said that the real estate wealth tax is not new, as it comes in accordance with Income Tax Law No. 91 of 2005, adding that 50% of revenues are deducted for costs and expenses, and the tax rate is progressive, as it begins From 2.5% to 27.5% according to the level of net profit segments.

The exempt segment, which is currently 21 thousand pounds.

Ragab Mahrous said: If a person’s total annual revenue is 60,000 pounds, the taxable base will be only 30,000, and the exempt segment amounts to 21,000 pounds, which means that the remaining 9,000 pounds will only be taxed, and 9,000 pounds is multiplied by 2.5. %, the person owed is only 225 pounds.

Tax targets

The Bouara Finance official said that the ministry is targeting in the current fiscal year 2.4 billion pounds in revenue from the real estate wealth tax on the incomes of natural persons, compared to 2.11 billion pounds in the previous fiscal year.

He added that if this tax is not paid, a fine will be imposed on the unpaid tax, at the credit and discount rate announced by the Central Bank on January 1 for the accounting year, plus 2%.

In its last meeting, the Monetary Policy Committee of the Central Bank of Egypt decided to raise the rates of the overnight deposit and lending return and the price of the main operation of the Central Bank by 100 basis points, to reach 19.25%, 20.25% and 19.75%, respectively. The credit and discount rate was raised by 100 basis points to 19.75%.