Established developers on the North Coast got hit by controversial retroactive land fees — Nuca is now rolling them back

The New Urban Communities Authority (Nuca) is slashing retroactive land assignment fees by up to 50% for North Coast projects allocated before February 2024, two government officials tell EnterpriseAM. The authority will instead calculate the levies based only on the built-up area. The exact reduction — between 10-50% — will depend on each project’s master plan and footprint, sources tell us.

New projects allocated after February 2024 remain subject to a fixed flat fee of EGP 1k per sqm on the total land area, without the built-up area deduction, our sources confirm. Foreign developers will pay USD 20 per sqm, they say.

The mechanics: The new framework still requires developers to make a 20% upfront payment, with the remainder paid in installments over five years at a 10% interest rate. The original landowner is liable for the fees, not the sub-developer, we’re told.

IN CONTEXT– Nuca has collected roughly EGP 15 bn of its EGP 45 bn target so far, including EGP 6 bn from Mountain View and EGP 4 bn from Sodic, primarily for land allocated after the February 2024 cutoff, we’re told. The framework targets 83 companies to settle their dues, with 19 local firms reportedly having already paid the first 5% of the down payment.

Looking forward: Nuca is still reviewing petitions from foreign firms with local arms that are asking to settle their USD-denominated dues in EGP, we’re told.

Behind the move

This could be a peace offering. The gov’t was “prompted to re-evaluate,” one government official tells us, after noticing developers allocated land before February 2024 “sold a significant portion of their units at prices lower than what other companies would be able to charge to offset cost differences.”

And it comes on the back of another compromise. The government offered to ease payment terms last October on “improvement fees” introduced last summer after the real estate sector lobbied against the sudden burden. The move allowed developers to stretch the 20% down payment over a full year and capped the remaining interest at 10% instead of the higher Central Bank of Egypt benchmark rate.