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Egypt: The advantages of usufruct ownership of land

Egypt: The advantages of usufruct ownership of land
Region: Egypt
Created: Aug 19, 2010, modified: Jan 13, 2012, overall rating: 5.000

A recent study has highlighted the benefits of offering land to investors on a usufruct basis.

Under the usufruct system, land is offered to investors for periods ranging from 40 to 100 years in exchange for annual fees, while the ownership of the land remains with the state.

According to the study, produced by Abu Zaid Rageh - a housing expert and member of the Specialized National Councils, the direct sale of land has several drawbacks.

Rageh's study concludes that land sales cause the price of land to increase at a higher rate than the increase in the price of buildings. Additionally, the land is sometimes used for profiteering and once sold,  and it is often hard to change its use, because of developmental and urban planning requirements.

According to the report, the usufruct system also upholds national security, and guarantees that land, especially that of a special nature like the Sinai Peninsula, will not fall into the hands of foreigners.

The study emphasizes that the usufruct system does not contradict the principles of a free market. It cites a study by the European Economic and Social Committee which says that a significant number of governorates now have full authority to adopt the necessary policies to protect their land.

The study also cites recommendations made by the United Nations Conference on Human Settlements in Vancouver, 1976, which points out that land has a unique nature and a vital role for human settlements, and argues that land cannot be treated as a 'normal' resource to be owned by individuals and subject to market pressures.

The study also mentions that some countries have allowed foreigners to engage in the usufruct system, but typically impose restrictions. Limits for example are set on the area of land and the lease period.

Egyptian Civil Law organizes the usufruct system. Rageh’s study suggests, however, a need to set new rules in line with the nature of current development programmes.

Deserts and coastal areas away from urban communities should be offered to developmental projects on a usufruct basis, the study says, and the lease period in this case should be between 40-100 years.

Translated from the Arabic Edition.


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