Nuca cracks down on developers who re-sell land to others

The New Urban Communities Authority (Nuca) is coming for those empty plots of land frozen in time. A new system will penalize developers and individuals who’ve sat on plots they’ve been allocated, waiting for price appreciation instead of building, a senior government official tells EnterpriseAM.

The crackdown follows a pattern of developers flipping plots they’ve secured through Nuca into “development partnerships” with secondary builders — arrangements that effectively re-assigned land between companies and individuals while keeping the upside private. The new fees are designed to make sure the state captures a share of the appreciation that was, until now, flowing entirely to the original buyer and their partners.

How it works

How much will sub-developers pay? It depends: For land purchased in EGP, local sub-developers will have to pay Nuca an additional fee of EGP 1k per sqm. When partnering with a foreign sub-developer, a fee of USD 20 per sqm applies, regardless of whether the land was purchased in EGP or USD.

Payment terms also depend on your passport. Local sub-developers can settle fees by paying 20% upfront, with the remainder scheduled in installments over several years. Foreign sub-developers will need to settle their fees in a single lump sum.

MEANWHILE- Nuca doesn’t plan to raise prices for land anytime soon, our source tells us. Industry players have been complaining for years that the spiraling price of state land is driving real estate prices into the stratosphere at the same moment that most consumers can find quality housing increasingly out of reach. That has some developers openly talking about a crisis of affordability for middle-class buyers — and pushing the idea that we might be looking at 80 sqm flats becoming the next hot asset.

There are other developer fees boosting the treasury

The government has raked in some EGP 10 bn in North Coast “service improvement” fees from developers in Sahel, another official tells us. Some 564 companies are in talks to settle their fees, with some asking for leniency or a recalculation of dues, our source added.

REMEMBER- The government introduced infrastructure and what it’s calling serviceimprovement fees for the North Coast and the Cairo-Alexandria Desert Road last summer, later extending fees to encompass the Dabaa Axis. After initial pushback, payment terms were eased last October, allowing developers to pay levies in installments over up to 10 years.