Example : A taxpayer Own 3 flats :

The first flat for housing purposes he live in it &his family,

it’s market value estimated with 2 000 000 L.E.
The second flat for housing purposes he rent it to other
person with 8 000 L.E. monthly , it’s market value is
estimated with 1 500 000L.E.
The Third flat not for housing purposes and rent it to
other person to use it for commercial purposes with
monthly rent 10 000 L.E. It’s market value is estimated with
3 000 000 L.E.
Required : Calculate the real estate tax on every flat.
 Answer
We make 6 steps for every flat:
Step One : The estimated market value ( it is given ).
Step two : Calculate the capital value = Market value x 60%
Step Three : Calculate annual rental value ( revenue) = capital value x 3%
Step Four : Calculate annual net rental value = Annual rental value – estimated
expenses (30% or 32%)
Step five : Calculate annual tax bracket = annual net rental value – exemption
Step six : Calculate the real estate tax amount(payable) = Tax bracket x Tax rate
(1) First flat
Step One market value (G) = 2 000 000 L.E.
Step Two capital value (C) = 2 000 000 X 60% = 1 200 000 L.E.
Step Three Annual rental value = 1 200 000 X 3% = 36 000 L.E.
Step Four Annual net rental value = 36 000 – (36 000 X30%)
= 36 000 – 10 800 = 25 200 L.E.
Step Five Annual tax bracket(base) = 25 200 – 24 000 = 1200 L.E.
Step six Annual real estate tax amount = 1200 X10% = 120L.E.
(2) Second flat:
Step One market value (G) = 1 500 000 L.E.
Step Two capital value (C) = 1 500 000 X 60% = 900 000 L.E.
Step Three Annual rental value = 900 000 X 3% = 27 000 L.E.
Step Four Annual net rental value = 27 000 – (27 000 X30%)
= 27 000 – 8 100 = 18 900 L.E.
Step Five Annual tax bracket = 1 8 900 – 0 = 18 900 L.E.
Step six Annual real estate tax amount = 18 900 X10% = 1890 L.E.
( because the flat is used for housing purposes & rent it to other person
there is no exemption .)
Third flat
Step One market value (G) = 3 000 000 L.E.
Step Two capital value (C) = 3 000 000 X 60% = 1 800 000 L.E.
Step Three Annual rental value = 1 800 000 X 3% = 54 000 L.E.
Step Four Annual net rental value = 54 000 – (54 000 X32%)
= 54 000 – 17 280 = 36 720L.E.
Step Five Annual tax bracket =36 720 – 1 200 = 35 520 L.E.
Step six Annual real estate tax amount = 35 520 X10% = 3552L.E.
Real estate tax on factories ( industrial units )
There are five rules :
1- The percentage of building is 60% of the total land area .
2- The estimated value of the squared meter of building is
200L.E./M2.
3- The annual rental value is estimated with 3% of the estimated
value of building.
4- The percentage of expenses 32% of the annual rental value .
5- The tax rate is 10% .
Example : A factory in the Tens of Ramadan , it’s total area of land
25 000 M2 .
Required : Calculate the annual real estate tax amount .
Answer
(1) The area of building = Total area of land X 60%
= 25 000 X 60% =15 000 M2
(2) The estimated value of building = The area of building X 200L.E.
= 15 000 X 200L.E. = 3 000 000 L.E.
(3) Calculate the annual rental value = The value of building X 3%

= 3 000 000 X 3% = 90000 L.E

(4) Calculate the annual net rental value

= Annual rental value – 32% of it estimated expenses

= 90 000 – ( 90 000 X 32% ) = 90 000 -- 28 800 = 61 200

(5) Calculate annual real estate tax

= annual net rental value X tax rate

= 61 200 X 10% = 6 120 L.E.