Buying property in Egypt from the USA
The United States taxes its citizens and green card holders on worldwide income regardless of where they live. That makes the US reporting burden on Egyptian property heavier than for buyers from almost anywhere else — and the penalties are for failing to file, not for owing tax.
Egyptian law treats an American buyer like any other foreigner. The complexity is entirely on the US side, and it is real enough that American buyers should line up a cross-border accountant before they line up a property.
The treaty, and the savings clause
The US-Egypt income tax convention was signed at Cairo on 24 August 1980, entered into force on 31 December 1981 and has had general effect since 1 January 1982.
The critical feature for an American buyer is the savings clause. The treaty preserves the United States' right to tax its own citizens under domestic law largely as if the treaty did not exist, with limited exceptions. So the treaty does not exempt you from US tax on Egyptian rental income — it mainly gives you a mechanism to avoid being taxed twice, via the foreign tax credit.
The reporting that catches people
| Form | What triggers it |
|---|---|
| FinCEN 114 (FBAR) | Foreign financial accounts exceeding USD 10,000 in aggregate at any point in the year — the Egyptian bank account you open to buy and collect rent counts |
| Form 8938 (FATCA) | Specified foreign financial assets above threshold; thresholds differ for residents and those living abroad |
| Schedule E | Rental income and expenses from the Egyptian property |
| Form 1116 | Foreign tax credit for Egyptian tax paid |
| Form 5471 / 8865 | If you hold through an Egyptian company — a common structure above the two-unit cap, and a reporting step change |
Note what is and is not reportable. Directly held foreign real estate is generally not itself an FBAR or FATCA asset — but the Egyptian bank account you use to pay for it and to receive rent almost certainly is. That distinction is where American buyers most often get caught out.
Penalties in this area attach to non-filing rather than to unpaid tax, and can be severe relative to the sums involved. File even when nothing is owed.
Other US-side points
- Rental income and depreciation: foreign residential property is depreciated over a longer recovery period than US property. Your accountant will know; many software packages get it wrong.
- Currency gains can be taxable events in their own right in certain circumstances, separately from the property gain.
- Capital gain on sale is computed in dollars, using exchange rates at purchase and at sale — so you can owe US tax on a gain that does not exist in pounds, or vice versa.
- US estate tax applies to worldwide assets for US citizens and domiciliaries.
Moving the money and buying remotely
- Funds should enter Egypt through a state-owned Egyptian bank with documentation of source. Keep every record for the whole holding period — repatriating proceeds later is far easier when the inbound transfer is documented.
- Expect compliance questions from your US bank on a large international transfer. Have source-of-funds evidence ready.
- A power of attorney executed in the US needs notarisation and consular legalisation before an Egyptian lawyer can act on it. Start that early — it is the step that delays American purchases most often.
- Egyptian registration for a foreign buyer includes a security clearance that adds months. Plan around it rather than being surprised by it.
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Common questions
Can Americans buy property in Egypt?
Yes, on the same terms as other foreign nationals: two residential units up to 4,000 square metres in aggregate, freehold on the Red Sea mainland, usufruct only in Sinai.
Do I have to report Egyptian property to the IRS?
Directly held foreign real estate is generally not itself an FBAR or FATCA asset, but the Egyptian bank account you use for the purchase and for rent very likely is, and rental income is reportable. Take advice from a cross-border accountant.
Is there a US-Egypt tax treaty?
Yes — signed 24 August 1980, in force from 31 December 1981, effective from 1 January 1982. Its savings clause preserves the US right to tax its own citizens, so relief comes mainly through the foreign tax credit.
Can I buy without travelling to Egypt?
Much of it can be handled by an Egyptian lawyer under a notarised and consularly legalised power of attorney. Someone you trust should still see the property.
Last reviewed September 2026. Prices, tax rates, residency thresholds and ownership rules in Egypt change frequently — verify anything you are relying on.