Mclaren - Property Abroad

Foreign purchasers have the right to own real estate and land in Egypt. Today the government recognizes the great value foreign investors in property have for the success of the economy and have set about actively encouraging overseas buyers to Egypt. New laws have been established to make the Egyptian property purchase procedure more secure. For example, the government can no longer impound or nationalize any property they wish – a practice that stood for centuries. These changes, along with a few others, are increasing confidence amongst overseas buyers.

We will gladly guide your through the purchase process in Egypt to ensure you are fully informed of the facts to avoid any potential pitfalls.

Once you decide on a property, you will need to pay a holding deposit to take the property off the market while contracts are drawn up.

It is completely usual to negotiate a property’s selling price in Egypt, unless you are buying off-plan when the price is fixed.
Lawyers

Lawyers in Egypt will normally speak English and will be able to produce your necessary paperwork in Arabic, as required by all the authorities. Egypt has many complex real estate registration issues so it is critical to have a lawyer conduct the appropriate searches and provide you with legal advice regarding the purchase.

Local lawyers will also help you through the best way to conduct business with the local people who have their own particular idiosyncrasies and customs which are important to be aware of.

Fees and Taxes

Property registration and legal fees for conveyance total around 6%.

Stamp Duty on property is payable by the buyer at 3%. The buyer will also pay a small inspection and measurement fee (approx. 65 euros).

Tax on any form of income from property runs at 20 to 22% and is basically the alternative to Value Added Tax. Many countries enjoy a double taxation treaty with Egypt.

Egypt levies no inheritance or capital gains taxes.

Registration

Most Egyptian properties are not registered, even though registration is an essential pre-requisite to a purchase. Therefore the lawyer’s assistance in liaising with the Real Estate Registration Office in Egypt is essential in order to ensure the property is duly registered and prepared for foreign purchase. Registration can take up to four months. After inspections and payment of taxes/fees, you will finally obtain a new title from the Registry.

Mortgages

Currently there are no mortgage facilities available to foreigners in Egypt, though this situation is due to change in the near future with the full implementation of a new mortgage law in Egypt. The best option today is to obtain a mortgage abroad or to free up equity in your country of residence via a re-mortgage or an equity release scheme. In this way you will be able to purchase your property in Egypt outright.

The current lack of a fully developed lending system has slowed the construction industry in Egypt, even though Cairo is one of the most densely populated cities in the world and the need for new housing is starkly apparent. This situation is destined to change as soon as mortgage facilities become more commonplace.

FAQs

1. Where is the Desert Pearl Apartment Resort?
   The Desert Pearl resort can be found near the shores of the Red Sea, in the town of Hurghada, Egypt. About 15 km south of El Gouna.
   
   
2. How many properties will there be at Desert Pearl?
   This resort will comprise 225 units. There will be 44 studios, 48 one-bedroom, 117 two-bedroom and 16 three-bedroom apartments.
   
   
3. Are the properties freehold or leasehold?
   All the properties are freehold.
   
   
4. Who is developing Desert Pearl?
   Worldwide Destinations are the developers of Desert Pearl Beach Apartments
   
   
5. Has the Developer got land title?
   Yes, the developer has full legal title to the land.
   
   
6. What Licenses have been granted?
   All the necessary licenses and planning permissions have been obtained, and are available on request.
   
   
7. When will construction begin?
   Construction has already started.
   
   
8. When will the property be completed?
   The properties will be completed in March 2008.
   
   
9. What are the payment terms on the property?
   Pre-launch prices start at £17,600. We facilitate an effortless payment plan in five simple steps. First payment of 10% deposit. Three further payments of 10% in the remaining 12 month period. A final 60% upon completion paid with either an arranged mortgage* or cash.
   One off full 40% down payment will grant every buyer a free Lifetime Lawyer membership worth £3,995, which will cover the completion cost of your purchase.
   *Mortgage subject to status.
   
   
10. Is there a Pre-Launch Special Offer?
    Yes! The first 50 units can benefit from above scheduled payment terms.
    
    
11. Can the properties be bought in a company name?
    Yes, but companies cannot take out the mortgage.
    
    
12. Are mortgages available?
    Yes, a capital + repayment type mortgage, subject-to-status, on 60% of the purchase price is available at 7.9% flat rate for a maximum period of 10 years.
    
    
13. What is the name of the bank handling the mortgage?
    Refer to document ‘Desert Pearl Mortgage Package’
    
    
14. What are the details of the mortgage package?
    Refer to document: ‘Desert Pearl Mortgage Package’.
    
    
15. What is the yearly maintenance fee?
    The yearly maintenance fee will be GBP 500 per annum for studios, one bed professionals, and 1 bed deluxe - £600 for 2 beds – £700 for 3 beds.
    
    
16. Is there a builder’s warranty on new build, if so how long?
    Yes, warranties for new build are for two years.
    
    
17. What type of running costs should the client expect?
    Apart from the annual Real Estate Tax of EGP 500 (approx. GBP 50) and the annual maintenance fee of GBP 500+, there will be utility (water + electricity) charges substantially lower than by European comparison.
    
    
18. How much will the building + contents insurance cost?
    Approx GB.£ 100 p.a.
    
    
19. What is the construction of the building?
    The foundation of the building is reinforced concrete. The construction is of brick.
    
    
20. What will be the orientation of the apartments?
    The apartments will face South-East.
    
    
21. What will be the layout of the development?
    There will be 12 buildings forming the whole site. On average, each building will have 5 floors each with 4 apartments per floor. Each of these buildings with 20 apartments will have a lift for their own use.
    
    
22. Will the apartments have sea views?
    Apartments on the third, fourth and fifth floors will have sea views.
    
    
23. Will there be a rental pool?
    Yes, with rental prices based on our achievable rental return calculations – refer to our DP Rental Return document.
    
    
24. How long is the rental season?
    12 months.
    
    
25. What are the expected rental opportunities in the area?
    Refer to final page of brochure.
    
    
26. What is Egyptian Design & Finish?
    Normally in Egypt a new build property is sold as a shell. Doors and windows are not installed, walls and floors are not finished, and kitchens and bathrooms are not equipped
    
    
27. What is European Design & Finish?
    European Design & Finish includes; polished ceramic floors, tiling in kitchen and bathrooms, windows and doors installed, all electrical installations, pre-installation for digital TV platforms as well as sockets for telephone, television and data lines. Fitted kitchen with base units, stainless steel sink, granite worktops and mixer taps. Bathroom sanitary fittings in white porcelain (toilets, sinks, baths showers) with mixer taps and extractor fans. Bedrooms with fitted wardrobes.
    NB: We will be providing European Design & Finish.
    
    
28. Are the properties sold fully furnished?
    Furniture and kitchen appliances are not included in the sale price, but will be available as furniture packages.
    
    
29. What are the purchase costs?
    Registration of the unit and lawyer fees will be £995 all in.
    
    
30. What are the lawyer’s fees involved in the purchase of the apartment?
    See above.
    
    
31. Is there a Real Estate Tax?
    There is an annual Real Estate Tax of EGP 500 (approx. GBP 50).
    
    
32. Is there any Stamp Duty?
    No.
    
    
33. Is there any Government Tax?
    No.
    
    
34. Is there any Capital Gains Tax or V.A.T?
    No.
    
    
35. Is there any Inheritance Tax?
    No.
    
    
36. Can I sell my property at any time?
    Yes.
37. What is the general overview of the area?
    The town of Hurghada, known as Al-Ghardaka in Arabic was founded in the early 20th century as a fishing village, with over 40km of coastal resorts and spectacular beaches.
    The Red Sea Riviera has fast become a community of mixed nationalities and cultures. The permanent summer weather and leisure activities, including desert safaris, diving and golf, make this the most popular resort in Egypt.
    With its crystal clear water, untouched reefs and a multitude of ship-wrecks, Hurghada has become one of the most popular diving and snorkelling destinations in the world.
    Nearby lie the stunning resorts of Sahl Hasheesh and El Gouna, both exclusive destinations offering residents and tourists fantastic views of the desert, mountains and natural lagoons. At the heart of the El Gouna Resort is the Abu Tig Marina, the most beautiful harbour on the Red Sea designed around the spectacular El Gouna Golf Club, an 18-hole, PGA professional golf course.
    
    
38. What are the facilities in development, immediate and surrounding areas?
    Swimming pool and bar, gardens, internet café/business centre, gymnasium, games room and laundry – all within a gated environment. For information on surrounding area refer to brochure.
    
    
39. How long are the seasons in Hurghada?
    The Red Sea Riviera’s warm climate makes it an ideal destination at any time of the year. There are two seasons: a hot summer, which runs from May to October, followed by a mild winter for the remaining months. Temperatures range from a minimum average of 15ºC (59ºF) in winter, with cool nights, to 30ºC (86ºF) in summer, with comfortable warm nights.
    
    
40. How accessible is the area?
    Flight time from the UK is 4.5 hours with scheduled weekly flights. Charter flights from Germany are almost daily. Flights from other major European cities include Munich 3.5 hours & Rome 3 Hours
    
    
41. How do you get there?
    Egypt's national air carrier is EgyptAir, and Air Sinai also has good connections in Egypt. Most travellers come into Egypt through Cairo, although people are increasingly disembarking at Alexandria, Luxor, Aswan, Hurghada (Al-Ghardaka) and Sharm el-Sheikh. These airports are serviced by a number of smaller carriers and charter companies with direct connections to Europe. Refer to attached document  ‘DP Europe Direct To Hurghada’. BA fly twice a week from Gatwick directly to Hurghada
    
    
42. What are the tourism figures for Egypt?
    Refer to attached document ‘DP Egypt Tourism Report’.