The Cabinet, at its meeting today chaired by Dr. Mostafa Madbouly, reviewed the results of the work of the working group formed by Prime Minister's Decree No. 1823 of 2025 to study the appropriate legal mechanism for abolishing the financial fees for changing the activity from (residential / commercial / administrative / mixed) uses to hotel use, in a way that allows the establishment of the largest possible number of hotel establishments and units.
The results included a proposed draft decree approving an incentive to encourage the construction, establishment or operation of hotel establishments within the scope of local administration units, whereby projects to build, establish or operate hotel establishments that are planned or already established within the scope of local administration units would be granted a conditional incentive exempting the land or buildings, as the case may be, from paying the improvement charge due for changing their use from various activities to hotel activity, in accordance with the provisions of the Building Law issued by Law No. 119 of 2008 and its executive regulations.
To benefit from this exemption, a set of conditions and rules must be met, including:
Approval by the ministry responsible for tourism affairs of the suitability of the land or building for hotel use.
Approval by the Supreme Council for Planning and Urban Development of changing the use of the land or buildings, as the case may be, to hotel activity, based on a submission by the council's technical secretariat, in coordination with the competent governor and the minister responsible for tourism affairs.
Starting hotel operations within the following periods:
For land:
Two years for projects of up to 100 rooms.
3 years for projects of more than 100 rooms and up to 300 rooms.
5 years for projects of more than 300 rooms.
For buildings:
One year for projects of up to 100 rooms.
Two years for projects of more than 100 rooms and up to 300 rooms.
3 years for projects of more than 300 rooms.
These periods are calculated from the date of issuance or amendment of the building permits for the land or buildings, as the case may be. By decree of the Prime Minister, based on a submission by the minister responsible for tourism affairs, these periods may be extended by one additional year if the completion rate of the licensed works reaches 80% or more.
The decree also stipulates that the exempted land or buildings, as the case may be, may not be disposed of before hotel operations begin based on a license from the ministry responsible for tourism affairs.
The draft decree also stipulates that the ministry responsible for tourism affairs, in coordination with the relevant governorate, shall determine the value of the improvement charge due for changing the use of the land and buildings subject to the provisions of this decree, to be recorded as an incentive granted to the said hotel projects. The ministry responsible for tourism affairs shall notify the owner of the land or buildings whose exemption has been approved of the value of the incentive granted.
In the event of a violation of the conditions and rules stipulated in this decree, the incentive granted under it shall be forfeited, and the party concerned shall be obliged to pay the improvement charge due plus interest equivalent to the interest rate announced by the Central Bank, from the date of the Supreme Council for Planning and Urban Development's approval of the change of use, in accordance with the provisions of Law No. 222 of 1955 on imposing an improvement charge on real estate that is improved due to public utility works.
The provisions of this decree apply to hotel establishments but not to tourist establishments, according to the statement published on the official Facebook page of the Egyptian Cabinet.
