Ethiopian lawmakers ratify property tax proclamation

Fana Media Corporation reports that the House of Peoples' Representatives passed the property tax proclamation by a majority vote in its 15th regular session. The Council of Ministers sent the bill to parliament on June 14, 2024. The stated aims are a fairer spread of wealth among city residents, better government services and money for urban infrastructure. The tax links to the rising value of property. The law covers cities across the country, and regional states can issue their own property tax laws under it.

What this means for homeowners

Urban property owners should expect a new yearly cost. The tax ties to property value, so owners in high-value areas will likely pay more than owners in low-value areas. The exact rate and the date of the first bill depend on the region and the city, because regions can set their own laws under the federal framework.

Steps for owners now:

• Check your records. Make sure your title deed, plot size and building details are correct at the land administration office. Valuation will use these records.
• Budget for the tax. Add an estimate to your yearly holding costs, next to lease payments and maintenance.
• Watch for valuation notices. If a city values your property too high, there may be a way to appeal. Keep evidence such as photos and recent sale prices.

What this means for buyers and landlords

Buyers should add the tax to the cost of owning, not only the purchase price. Landlords may try to pass part of the cost to tenants through higher rent. Investors who hold empty units for a future price rise will now carry a cost each year.

Our guide to property tax and fees in Ethiopia lists the other taxes and fees on a purchase. For costs by area, see house prices in Addis Ababa.