By: Elham AboulFateh
In the appropriate time, we notice that the president, as usual, intervene and ordered to postpone the implementation of the new amendments to Real Estate Registration Law 186/2020. The presidential directive aims to postpone the amendments for a transitional period of not less than two years, in order to provide an opportunity and time for a community dialogue.
The new president’s directive stipulated that that during that transitional period, a fixed, reduced and clear value must be collected when registering the property, according to the space and type of the property, instead of the tax currently imposed on real estate transactions.
The president’s directive proves that he realized that there is an unjustified duplication that weigh heavily on the citizen through the postponed amendment, “the seller” had to pay a real estate tax of 2.5% of the market value of the property .. and when he evades this tax, the buyers must pay it upon registration in addition to the registration fee!
What reassured me is that the Ministry of Justice has learned the lesson as the minister was keen to clarify the meaning of the presidential directive: The government will determine the value of the lump-sum amounts during the last period because “the president has instructed that these lump-sum amounts must be affordable to citizens.”
Three matters should be adhered to and clarified to the people within the period granted by the president: the first is lump-sum amounts must be affordable to citizens, the second the right of the citizen to facilities supply, and the third is that the buyer does not pay the tax that the seller evaded!
I suggest that the real estate tax should be reduced from 2.5% to only 0.5% to encourage citizens to register and not to resort to fraud, so that the citizen does not pay the tax twice (when buying and when selling) for the same property!
Finally.. I hope that the two-year period granted by the president will be an opportunity not to relax and forget the matter, but to accelerate introducing electronic mechanization in all service institutions, and not only the Recorder of deeds.
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