Buying and selling property can be tricky for Egyptians as much as for foreigners, and there are pitfalls to be avoided.
1. You must ensure that the seller has the legal right to sell. There have been very many cases - court cases - where property has been sold when the seller did not have clear title to the asset. You must be aware that the laws of inheritance in Egypt are such that assets virtually never get passed onto a single beneficiary: therefore many if not most properties have multiple ownership and it is critical to ascertain that the person selling does indeed have the sole right to sell.
2. This situation does not occur if you are purchasing a new property directly from the developer.
3. Egypt's land registry is not as developed as in Europe or the USA, although great efforts have been made in recent years to improve the system. When we first arrived, there was no registration of title, and you were purchasing based solely on a sales contract, without real protection. This was because the costs of registration were exceedingly high and noone wanted to spend the money. When mortgages were introduced in recent times, the lenders would not lend without clear title for the asset being present. Registration fees were slashed, and certainly most if not all new builds now have title deeds. Older properties may or may not.
4. If you are buying an older property (actually ANY property) you would be foolish to buy without title registration. If such registration documents are not available from the vendor - either you walk, or you insist that he does the registration prior to sale.
5. Once you have bought, you MUST register the property in your own name. Be aware that registration by foreigners does take longer than for Egyptians.
6. Your lawyer will ask for a Power of Attorney ("tawkil") to do all this. You MUST have the tawkil translated before you sign it. Be absolutely sure that the powers that you are granting to your attorney do not go beyond what you specifically want to grant him. Do not give a general power, that allows him to do anything in your name.
7. All documents have to be notarised, including the tawkil, at the Sharia Akari or Notary Public. You will be obliged to hire an accredited translator to accompany you. I recommend that you do not hire a translator that is hanging around the Sharia Akari: I am not saying that they are dishonest, but my experience is that they want to rush you, so that they can move onto the next client. Professional translators are expensive - but you are investing in a home purchase, and you should view it as part of the investment! The translators are there to help and protect you, as indeed is the entire notarisation process which can be very time consuming and arduous.
8. On the subject of translation, I recommend that ALL documents are translated: property description, sales contract, bill of sale, etc...
9. Check the names on the utility bills. In Egypt, the name on these bills is taken as a strong indicator of ownership. If the name is different to the name of the vendor, then ask for an explanation.
That is all I can think of for now. Basically be prudent and cautious - more so than you might be in your own country: the legal protections that you expect back home may not be as strong here. It is very much "caveat emptor" - buyer beware! And this applies for Egyptians just as much as it does for foreigners. We are very lucky to be in a country that permits home ownership by foreigners: you should be very happy once you have navigated the process and are installed in your home.
I have bought two residential properties and built my own factory on bare land that I purchased. It was never easy, but we got there in the end.
I am neither a lawyer nor a real estate agent: I am giving the fruits of my own experience, and I am NOT responsible for any issues that might arise as a consequence of what I have written above!
I did miss one very important aspect of property ownership, and that is the issue of inheritance from a foreigner.
This is a massively complex subject which I will not get into here. However, you have to know what happens to your assets in Egypt if/when you pass away.
Do not assume that your spouse will automatically inherit, do not assume that your children will automatically inherit.
Your religion will have bearing on this.
If you are going into co-ownership with your Egyptian spouse (you do not mention your own gender or nationality, and this is important), look carefully as to what happens if he/she passes away.
Check out the question of wills or testaments. After 27 years here, I still do not have a clear explanation from the lawyers as to whether wills supercede the statutory distribution defined by the law; especially for foreigners.
There are various different systems of buying in Egypt, depending on the area and whether it's a new-build or resale property. For new or off-plan properties, you'll normally pay a reservation deposit of Â200-1,000 (5 to 10 per cent).
In general, Egyptian nationals, either natural persons or legal entities (regardless of their ultimate ownership), have the right to own property in different areas of Egypt. These rights are subject to various terms and conditions set out by the government. Legal entities in general have the right to own property necessary for their commercial objectives, for example as a head office or as an industrial plant. For foreigners, whether natural persons or legal entities, there are certain restricted areas and limitations that apply to their rights to own property.
Law No. 230 of 1996, regulating the Ownership by Foreigners of Buildings and Land Plots, governs the ownership of property by natural foreign persons for residential purposes. There are restrictions on such ownership; for example, a foreigner who owns a plot of land must erect a building on the land within five years of registering his ownership with the Notary Public. Ownership of non-residential property by foreigners is regulated by other laws. For example there are restrictions on the surface area and number of properties a foreigner may own (currently limited to a maximum of 4,000 square metres and two properties).
Law No. 14 of 2014 restricts the ownership of property in Sinai. The government has designated development areas in Sinai where companies (whether owned by Egyptians or foreigners) may have the right of usufruct over designated property. Such usufruct rights can be granted for terms of up to fifty years. It must be noted that Egyptian must own at least 55% of the ultimate shareholding of such companies.
According to the new amendments reported Wednesday by the Egyptian media, foreigners can be granted an Egyptian passport if they buy a real estate property belonging to the State or a public company worth at least 300,000 dollars, against 500,000 dollars previously, or if they make a deposit in an Egyptian bank account of 500,000 dollars against the 750,000 required until now.
In the Western European cities more affordable than Cairo, a range of measures discourages property speculation by both citizens and non-citizens, including complex bureaucratic processes that incur high costs and taxes, as well as various forms of housing aid and subsidization for residents. In Germany, for example, a capital gains tax of 25 percent is incurred by both citizens and foreigners if property is sold within 10 years of purchase, a measure that discourages speculative buying. Under Danish law, foreigners wishing to buy property in Copenhagen must apply for permission to do so.[13]
When it comes to property, foreigners can buy up to two residential properties in Egypt and ownership is restricted to certain touristic zones. Foreigners who buy in these touristic zones are granted the same rights as Egyptians apart from in Sharm El Sheikh (which we will explore in further detail below).
If you want to consider buying in other locations in Egypt, you need to check the ownership basis (leasehold or freehold), social demographic (there are some parts of Egypt that are not appropriate for foreigners) and you must check that foreign ownership is allowed in the area. Foreign ownership is only allowed in areas designated as touristic zones by the government. These areas include Hurghada, the Red Sea (already contemplated above) as well as Sidi Abd Rahmen and Raas El Hakma which are two development towns on the Mediterranean North Coast to the west of Alexandria.
Decide how long you want the property for and do you want to rent it. There are two methods to safeguard your property ownership in Egypt. One is to register the property and the other is to secure a certificate of validity which in effect legalises your purchase contract. Owners of registered properties must own them for 5 years, you are not allowed to sell or rent the property before this time. This is the most secure method of ownership, but the conditions often make it unviable for foreigners. So, if you are looking for a flip scenario or a fly-to-let or even if you want to buy more than two properties, then the certificate of validity will be your best option, albeit less secure.
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