Egypt Approves Second Tax Reform Package — What It Means for Property Investors
Egypt Approves Second Tax Reform Package — What It Means for Property Investors
Egypt’s parliament has approved a sweeping second package of tax reforms, effective immediately, designed to reduce business costs, improve liquidity, and attract foreign investment. For property buyers and investors on the Red Sea coast, several provisions carry direct implications.
Property Transaction Tax — Unchanged at 2.5%
The existing 2.5% property transaction tax on individuals remains in place, calculated on the property’s sale value regardless of the number of transactions. Transfers between spouses, parents, children, and direct descendants remain fully exempt.
Crucially, the payment deadline has been extended from 30 to 60 days, giving buyers more breathing room to complete transactions — particularly useful for foreign investors navigating cross-border banking.
Capital Gains Replaced with Stamp Duty
In a major shift for securities taxation, the government has replaced capital gains tax with a stamp duty to encourage trading and investment on the Egyptian Exchange (EGX). The stamp duty for non-resident investors has been reduced to 0.5 per mille from 1.25 per mille, aligning treatment with resident investors.
VAT and Manufacturing Incentives
- VAT suspension on machinery and equipment for industrial production extended from 2 to 4 years
- VAT on medical devices cut from 14% to 5%
- VAT refund periods shortened: simplified regime businesses from 6 to 3 months, others from 6 to 4 months
Infrastructure Project Benefits
Companies participating in national infrastructure projects will benefit from higher deductible interest expenses on project loans and an exemption from withholding tax on foreign loans — reducing financing costs for large-scale developments including Red Sea resort projects.
IMF Programme Context
The reforms are a key commitment under Egypt’s $8 billion Extended Fund Facility (EFF) programme with the International Monetary Fund. A staff-level agreement was recently reached for the seventh review, paving the way for approximately $1.64 billion in new financing, subject to Executive Board approval.
What This Means for Hurghada Property Buyers
The extended payment deadline and stable transaction tax create a more predictable purchasing environment. Combined with the earlier Law 3/2026 reforms that raised the property tax exemption threshold to 100,000 annual rental value, Egypt’s tax framework for real estate is now among the most competitive in the region.
For investors targeting Hurghada, Sahl Hasheesh, or El Gouna, the combination of stable taxes, 0% installment plans, and 8–12% rental yields makes the Red Sea coast an increasingly attractive proposition.
Ready to invest? Contact MAMO Property on WhatsApp: +20 115 298 0998
Source: Al-Ahram, 2 July 2026
Co-founder of MAMO Property, real estate specialist in Hurghada with 16+ years experience in Egyptian property market.
