Egypt's property disposal tax after Law 151: rate, deadline, proof
What did Law 151 change in Egypt's property disposal tax? The rate stays 2.5%, payment is due within 60 days, and the contract value stands unless the ETA proves otherwise.
Executive summary
- Law No. 151 of 2026 replaced article 42 of the Income Tax Law with effect from 29 July 2026. A corrigendum published on 8 August 2026 corrected the article number from 43 to 42.
- The rate is unchanged: 2.5% of the gross value of the disposal, with no reduction, on built property and land for building outside villages.
- The disposer must pay within sixty days of the disposal. The period used to be thirty days.
- The value is the value stated in the contract, and the Egyptian Tax Authority (the ETA) bears the burden of proving a different one.
- A disposal made on or before 28 July 2026 is governed by the previous text.
- A late payment charge that starts in 2026 runs at 22.50%, and it may not exceed the tax itself.
The law's other changes are covered in Egypt income tax amendments 2026: what Law 151 changes.
What is taxed
The tax is charged at 2.5%, with no reduction, "on the gross value of the disposal of built property or land for building on it, other than in villages, however many the disposals", whether the disposal covers the whole property, part of it or a residential unit in it, "and whether the contracts of these disposals are registered or unregistered" (article 42, first paragraph).
A taxable disposal is "a disposal by sale, bequest, donation or gift, to persons other than ascendants, spouses or descendants", the creation of a usufruct over the property, or its lease for more than fifty years. Forced sales, administrative or judicial, expropriation for public benefit or improvement, and donations or gifts to the government, local administration units, public legal persons and public-benefit projects are not taxable. Contributing the property as an in-kind share in the capital of a joint-stock company is excluded, provided the shares received are not disposed of for five years.
The new text puts sale at the head of that list, so the words "to persons other than ascendants, spouses or descendants" now follow the whole list, set off from gift by a comma, and the corrigendum left this paragraph unchanged. A sale to an ascendant, spouse or descendant is therefore, like a bequest, donation or gift to them, not among the disposals the article makes taxable. In the previous text the same words followed bequest, donation and gift only, so a sale made on or before 28 July 2026 is taxable whoever the buyer. The ETA had issued no instruction on applying this provision by 9 October 2026, but a news item on its website of 14 September 2026, on a workshop about the second package of tax facilitation measures, reports the head of the ETA citing "a full exemption for disposals involving ascendants, descendants and spouses".
The tax applies to disposals by individuals. In its Periodic Book No. 16 of 2013 the ETA stated that it does not apply to disposals by legal persons, because article 42 sits in the book of the law on the income of natural persons. It is a different tax from the tax on built property imposed under Law 196 of 2008, which is outside the scope of this bulletin.
Heirs, and sellers who built for their own use
The new text expressly taxes an heir's disposal of property or land acquired by inheritance, and a seller's disposal of property or land they owned, whether as it stands or after building on it for their own use, "even if their disposals of it are multiple". The ETA had already treated an heir's repeated disposals this way in Periodic Book No. 6 of 2023.
These disposals, and the others caught by the first paragraph, are not treated as a trade "unless it is established to the Authority that these disposals were carried out as a trade, with the intent of dealing and making a profit" under article 19, item 7. If that is established, the tax already paid is deducted from the total taxes due from the taxpayer.
The value and the burden of proof
"The gross value of the disposal is determined according to what is stated in the contract of disposal, and the burden of proof lies on the Authority if this value is not adhered to." (article 42, fourth paragraph)
The previous text said nothing on how the value is fixed. The ETA's real estate disposals app, through which disposals are registered, the tax is paid and the clearance is issued, compares the contract value with an indicative value drawn from comparable cases and market value. If the contract value is lower, the app warns the taxpayer, who may amend the value or submit it as it stands, in which case the request goes to examination (the ETA's guide to the app). For disposals made from 29 July 2026, the burden of proving a value different from the contract lies on the ETA.
Who pays, and when
The disposer must pay within sixty days of the date of the disposal, and the late payment charge under article 110 runs from the day after that period ends. The disposer notifies the tax office of the disposal on Form 16 bis (survey), receives Form 8 bis (real estate disposals) after payment, and the real estate registry collects the tax when registering the disposal unless that form is produced (article 51 of the executive regulations, as replaced by Minister of Finance Decree No. 172 of 2015).
The new text no longer contains two paragraphs of the previous one: the bar on real estate registry offices, electricity and water companies and local administration units registering the property or serving it until proof of payment is produced, and the rule that a claim relating to registration of the property is not admitted without that proof.
The previous text, and which text applies
| Item | Previous text (Law 158 of 2018) | Current text (Law 151 of 2026) |
|---|---|---|
| In force | 26 July 2018 to 28 July 2026 | From 29 July 2026 |
| Rate and base | 2.5% of gross value, no reduction | Unchanged |
| Payment period | Thirty days from the disposal | Sixty days from the disposal |
| Value | No provision | Contract value; the ETA must prove otherwise |
| Sale to an ascendant, spouse or descendant | Taxable; the words follow bequest, donation and gift only | Not a taxable disposal; the words follow sale too |
| Heirs and own-use building | No express provision | Taxed however many the disposals; not a trade unless proved |
| Bar on registration and services before payment | Included | Not included |
Law 151 has no transitional provision for article 42 and took effect on the day after its publication. Article 225 of the Constitution provides that the "provisions of the laws shall only apply from the date of their entry into force", and that a law may provide otherwise only "in articles pertaining to non-criminal and non-tax-related matters". The date of the disposal therefore decides: a disposal made on or before 28 July 2026 falls under the previous text and its thirty-day period, and one made later falls under the new text. The ETA applied the 2018 replacement of the article in the same way, tying the taxation of an heir's disposal to the date of the disposal (Periodic Book No. 40 of 2018).
Late payment
The late payment charge is calculated "on the basis of the credit and discount rate announced by the Central Bank on the first of January preceding that date, plus 2%, disregarding fractions of a month and of a pound", and neither a grievance nor a court challenge suspends it (article 110). The rate on 1 January 2026 was 20.50% (ETA Periodic Book No. 1 of 2026), so a delay that starts in 2026 is charged at 22.50%. Earlier years' rates are in Egypt tax rates 2026.
The charge may not exceed 100% of the principal tax (article 45 bis of the Unified Tax Procedures Law, added by Law 7 of 2025). Unpaid amounts are collected through enforceable claims and administrative seizure (articles 45 and 46 of the same law), and, according to the ETA's guide to the app, no clearance is issued until the tax and the late payment charge are paid in full.
What this requires
- Record the date of each disposal precisely: it decides which text applies and when payment is due.
- Pay any tax still outstanding on disposals made before 29 July 2026 now; the thirty-day period has expired for all of them.
- State the real price in the contract and keep evidence of its payment: it is the tax base and the taxpayer's answer if the ETA disputes the value.
- Check the late payment charge the app calculates on disposals made from 29 July 2026: the law allows sixty days, and the app's guide, as at the date of this bulletin, still starts the charge thirty days after the disposal.
- When buying, obtain the seller's tax clearance (Form 8 bis, real estate disposals) before registration.
- Hold shares received for property contributed in kind to a joint-stock company for five years: that is the condition of the exclusion.
The firm's Tax Department calculates the tax on property disposals, reviews the contracts, the ETA's claims and late payment charges, and represents taxpayers when the ETA examines or disputes the value.
Mahmoud Nassef, Founder Partner
Chartered Accountant, Ministry of Finance, Egypt
Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation
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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.