The latest couple of laws that caused a lot of stir and buzz in the Egyptian Parliament before its summer vacation were the law of monopoly and the law of Real estate tax. Till now the implications of these two laws are discussed in the media and in between the people especially the law of Real estate tax.
I will not discuss the law of monopoly but I will discuss the real estate tax law.
This law in my opinion is a great one and in a civilized democratic societies , it can be considered a fair one.
Simply this law imposes taxes on real estate owners based on its value and the price they paid it for it . Already this tax is targeting the A Class who buy multi million palaces here and there in Egypt . It is fair thing in my opinion.It can generate annually millions to the State vaults from the rich people .
With my all respect the A Class now in Egypt are moving to the new compounds in the desert using the Water resources for their gardens and swimming pools with no consideration what so ever to the increasing demand for other classes to water along with other facilities.
In respectable civilized countries ,the money generated by this tax will be projected for the middle and low classes needs from infra-structure , this is what logic says.
It is justice and balance.
Already I think the person who pays more than L.E 5 Million for a house can pay the taxes so easily.
By the way I once saw in a Real State magazine a villa for sale and its owner wants in it L.E 21 Million !!?? It was not still finished.
zeinobia: As a renter, does this effect rental units?
ReplyDeleteNo vagabondblogger , it does not effect the rental units , the owner is the one who will pay the tax , and according to the law he can't raise the rent too and this is another part of the problem
ReplyDeleteIt actually DOES affect the rental units, since the law has some faults. It can be used to force the "resident" to pay, not essentially the owner. The owner can in a way force the resident to pay, this is number one.
ReplyDeleteThis is firstly.
Secondly, the tax is based on the PRICES, which is really not right, the real value of the Egyptian Pound is actually falling apart since a long time due to a very high rate of inflation. So it is supposed to be real-value bases, not on Price bases.
For example in March the inflation rate was 21%, so, what was in value of 100 thousand in February has a monetary value of 120 thousand in March, imagine the chaos in the taxes then?
I also need the full text since I didn't have all of it till now, so please send me it if available, since I hear many rumors which says that there is a max-price-limit for the tax which will make the Class A mentioned in your post partially exempted from the taxes.
@Mohamed El-Gohary , I read like somethings like this from here and there , but those who mostly complain are the real rich. already from the principle it is great but how it is going to be implemented this is the question and the most important question ,the true deal , how they are going to spend this money; the tax revenues and in what ??
ReplyDeleteThe true deal you are referring has an answer which we all know :D
ReplyDeleteBut again it is the middle class I'm talking about. Here in Mansoura the normal price for 1 meter of land is 4000 LE, then a normal 100 meter land (which is really small since you will build maximum on only 80% of the land, in the law it is only 60%) cost 400 thousand LE alone, so what do you think about the cost of the building itself?
Another thing about this law is the duality of taxes, for example then normal clinic of the doctor will have to pay taxes for his income (many clinics now do not enter sufficient income to pay taxes) plus the real state income, which is totally unfair.
If they really need money, they can use Margret Thatcher's way of cutting Public Pay in unessential matters for example.