ETA Claims the Payment of Property Wealth Tax 2023
A Step to Accelerate Development in Egypt
The Property Wealth Tax is a tax paid to the Real Estate Taxation Authority (RETA) and applicable to individuals, who rent out their residential or commercial units. It is among the most important sources of developing Egypt’s resources.
It is worth noting that this tax is not new, as it has been imposed on citizens for many years, as Article no. 6 of the Income Tax Law stipulates that an annual tax shall be imposed on the total net income of resident and non-resident natural persons in respect of their income earned in Egypt.
How is the Property Wealth Tax Calculated?
According to the Income Tax Law No. (91) Of 2005, the property wealth tax is calculated by deducting 50% of the revenue generated from renting a residential or commercial unit as costs and expenses, and the tax is paid on the remainder at a rate ranges from 2.5% to 27.5%, based on the level of your net income.
Who Are Exempted from This Tax?
If your net annual income from renting out, whether furnished or for a limited period, or if it is for the purpose of primary or seasonal housing, does not exceed EGP 21,000 as of the tax period that ends after June 15, 2023, then you are exempted from this tax. You are also exempted, if you are an employee and has property wealth income, and your total net income does not exceed EGP 21,000.
Why Did This Tax Come on the Scene?
This tax came on the scene as a response to the growing trend of renting residential units for substantial monthly sums. As a result, the Egyptian Tax Authority (ETA) claimed that each citizen owning a residential unit, a summer vacation unit, or a shop, whether it is a furnished or fixed-term rental and rents it out, must notify ETA within 30 days from the date of leasing and submits a tax return containing the details of the rental unit, its address, and the other details. This is to pay the property wealth tax.
If property owners hide the valid rental value of the property, similar cases are considered, and the tax return is not accepted unless its credibility is confirmed. But if the citizen does not submit this document, he will be subjected to legal accountability in accordance with the provisions of the Unified Tax Procedures Law No. (206) of 2020 and will pay a fine calculated at the credit and discount rate announced by the Central Bank of Egypt on January 1 for the accounting year, plus 2%.
Declarations about This Tax
Dr. Fayez Al-Dabaani, head of ETA, stated that the owner of a residential unit rented for more than 2 million Egyptian pounds, or 64.7 thousand dollars, must pay the property wealth tax and the real estate tax, provided that the real estate tax is deducted from the costs of the property wealth tax account.
He added that Egypt’s general budget for the fiscal year 2023/2024 aims to achieve revenues from the property wealth tax worth 2.4 billion Egyptian pounds, or 78.7 million dollars, compared to 2.1 billion Egyptian pounds, or 68.5 million dollars, in the last fiscal year.
It is clear that ETA issues tax decisions that fall in Egypt’s favor and works to develop its resources and increase its income. As a result, it requires property owners to pay the property wealth tax, one of the most important sources of developing Egypt’s resources. If you want to learn more about this tax, click here.
Best Tax Services with AHG Chartered Accountants
AHG Chartered Accountants has 30 years of experience in providing all tax services, including corporate tax, salary tax, value-added tax (VAT), estate, gift & inheritance tax, and income tax, such as property wealth tax.
We have professional tax agents who are familiar with all the laws issued by ETA. They can provide tax advice, prepare tax returns, and ensure they comply with current tax legislation. In addition, they supervise the tax audit themselves.
If you want any tax-related services or tax advice, you will not find better than AHG Chartered Accountants. Our team has great experience in this field and will provide you with the best professional service.
