Egypt Rental Income Tax Guide — ضريبة الدخل من الإيجارات

the taxation of the rental income from the real estate in Egypt for 2026. The guide covers: the rental income tax rate — 10% of the net rental income after a mandatory 50% deduction for the expenses (effectively 5% of the gross rent); the building tax (ضريبة العقارات) at 2.5% of the annual rental value; the old lease law (pre-1996 contracts) versus the new lease law (free market) — the dramatically different rent amounts affect the tax base; the commercial versus residential treatment; and the non-resident landlord — the 10% withholding tax on the gross rent paid to the non-resident property owners.

Rental Income Tax — ضريبة دخل الإيجار (Individuals)

Rate — 10% after 50% mandatory deduction: The net rental income (the "صافي دخل الإيجار") is taxed at the flat rate of 10%. However, the law provides a mandatory 50% deduction for the expenses (the "خصم 50% للمصروفات") — the landlord does NOT need to prove the actual expenses; the 50% deduction covers all the maintenance, the management, the depreciation, and the other costs. The effective tax rate on the gross rent is: 10% × (100% - 50%) = 5% of the gross rent.
Calculation example: The gross annual rent of EGP 120,000 (EGP 10,000/month): the mandatory expense deduction = EGP 60,000 (50%), the net taxable rental income = EGP 60,000, the tax at 10% = EGP 6,000. The effective rate on the gross rent = 5%.
Filing obligation: The rental income must be declared in the annual personal income tax return (by March 31). The landlord may elect the actual expense method (instead of the 50% mandatory deduction) if the actual expenses exceed 50% of the gross rent — but this requires the documentation of the actual expenses (the receipts, the invoices, the maintenance contracts).
Exemption threshold: The rental income below the annual threshold of approximately EGP 12,000-15,000 (the exact amount is adjusted periodically) is exempt from the rental income tax. The multiple properties are aggregated for the threshold test.

Building Tax — ضريبة العقارات (2.5%)

Rate — 2.5% of annual rental value: The "ضريبة العقارات" (the "building tax" or the "property tax") is imposed at 2.5% of the "القيمة الإيجارية السنوية" (the "annual rental value") of the property. The rental value is assessed by the "لجنة تقدير القيمة الإيجارية" (the "Rental Value Assessment Committee") under the Ministry of Finance.
Assessment basis: The assessed rental value may differ significantly from the actual market rent, especially for the properties under the old lease law (pre-1996). The assessed value is typically lower than the market rent. The assessment is reviewed every 5 years or upon the change of the property status.
Who pays: The building tax is payable by the property owner (the "مالك العقار"), regardless of whether the property is rented, vacant, or owner-occupied. The owner may pass the building tax cost to the tenant under the lease contract terms, but the tax liability remains with the owner vis-à-vis the tax authority.
Filing and payment: The annual building tax return is due by December 31 for the current year. The payment may be made in two instalments: June 30 and December 31. The penalty for the late payment is 1% per month on the unpaid amount.
Exemptions: The building tax exemption applies to: (a) the properties with the annual rental value below the exemption threshold (approximately EGP 2,000-6,000 depending on the property type), (b) the properties used for the religious, the charitable, and the educational purposes, (c) the agricultural land and the farm buildings.

Old Lease Law (Pre-1996) vs New Lease Law — قانون الإيجار القديم والجديد

Old lease law — contracts before 1996: The properties rented under the old lease law (the "قانون الإيجار القديم" — the Law 49/1977 and the subsequent amendments before 1996) are subject to the rent control. The rent amounts are dramatically low (often EGP 50-500/month for the apartments that would rent for EGP 5,000-15,000/month on the open market). The old-law tenants have the inheritance rights — the children and the spouse may continue the tenancy after the tenant's death.
New lease law — contracts after 1996: The properties rented under the new lease law (the "قانون الإيجار الجديد" — the Law 4/1996 and the Law 6/1997) are subject to the free market rent. The rent amount is freely negotiated between the parties. The contract is for a fixed term (typically 1-5 years) with no automatic renewal. The new law does NOT provide the inheritance rights — the contract expires upon the tenant's death unless the contract provides otherwise.
Tax impact: The rental income tax and the building tax are calculated on the actual rent received (for the old-law properties) or the assessed rental value (for the building tax). The old-law properties produce minimal tax due to the very low rents. The new-law properties generate significantly higher tax revenues. The landlord may petition the ETA for the reduction of the assessed rental value if the property is subject to the rent control.

Commercial vs Residential — الإيجار التجاري مقابل السكني

Commercial property — different treatment: The commercial rental income (the "إيجار النشاط التجاري" — the rent from the shops, the offices, the warehouses, and the industrial premises) is subject to the same 10% rate after the 50% mandatory deduction, but the expenses deduction may be more favourable. The commercial leases under both the old and the new laws are generally free-market (the rent control for the commercial properties was largely phased out by the Constitutional Court rulings).
Commercial building tax: The building tax for the commercial premises is calculated at the same 2.5% rate but on a higher assessed rental value compared to the residential properties of the same size. The commercial properties are assessed at the market-based rental value, which results in a proportionally higher building tax.
VAT on commercial rent: The commercial rent is subject to 14% VAT (the "ضريبة القيمة المضافة على الإيجار التجاري"). The VAT-registered commercial tenant may recover the input VAT on the rent. The residential rent is NOT subject to the VAT. The non-residential rent (commercial, industrial, professional) is a taxable supply for the VAT purposes.
Vacation and short-term rentals (Airbnb): The short-term rental properties (including the "شقق مفروشة للإيجار السياحي" — the "furnished apartments for the tourism rental") are treated as the commercial activity. The income from the short-term rentals is subject to: (a) the rental income tax at 10% after the 50% deduction, (b) the VAT at 14% if the annual turnover exceeds EGP 500,000, (c) the "ضريبة السياحة" (the "tourism tax") at the rate set by the Ministry of Tourism.

Non-Resident Landlord — المالك غير المقيم (10% WHT)

10% withholding tax on gross rent: The non-resident landlord (the "مالك غير مقيم" — the person who is NOT an Egyptian tax resident) is subject to the 10% withholding tax on the gross rent paid by the Egyptian tenant. The tenant (or the property manager in Egypt) acts as the withholding agent and must: (a) deduct 10% from the gross rent payment, (b) remit the withheld amount to the ETA within 15 days of the deduction, (c) issue the WHT certificate to the non-resident landlord.
No 50% deduction for non-residents: Unlike the resident landlord (who benefits from the 50% mandatory expense deduction), the non-resident landlord is taxed on the gross rent at the 10% rate. The non-resident cannot claim the expense deduction because the Egyptian tax law restricts the 50% deduction to the resident taxpayers. The effective rate for the non-resident is 10% of the gross rent (versus 5% for the resident).
Treaty relief: The non-resident landlord from a DTA country may claim the reduced WHT rate under the applicable double tax treaty. Most Egypt DTAs provide for the rental income (classified as the "income from immovable property") to be taxed in the source country (Egypt) at the domestic rate. However, the treaty may limit the Egyptian tax to 10% or provide for the exclusive taxation in the residence country.
Tax representative requirement: The non-resident landlord may be required to appoint a "ممثل ضريبي" (the "tax representative" or the "tax agent") in Egypt for the compliance purposes. The tax representative is responsible for: the filing of the annual tax return, the communication with the ETA, and the payment of the taxes on behalf of the non-resident.