· LEX Africa
Ethiopia's Property Door is Open; Now there is a RuleBook
Topics:Law and policyInvestment
Summary of the LEX Africa report
Directive No. 1147/2026 turns the foreign residential property regime of Proclamation No. 1388/2025 into a working procedure. A foreign national first needs a permit from the Ministry of Urban and Infrastructure. Minimum capital for one house is USD 150,000 in Addis Ababa and Sheger City, USD 120,000 in most other regions and Dire Dawa, and USD 100,000 in Afar, Benishangul-Gumuz and Gambella. The funds go into a blocked account, and a foreign national may acquire only one residential house.
Key points
- Directive No. 1147/2026 sets the procedure for foreign ownership under Proclamation No. 1388/2025.
- Buyers need a permit from the Ministry of Urban and Infrastructure.
- Minimum capital is USD 150,000 in Addis Ababa and Sheger City and lower in other regions.
- A foreign national may acquire only one residential house, and the reform creates no private land ownership.
Real.et analysis
LEX Africa reports that Directive No. 1147/2026 sets out the working procedure for foreign home ownership. The directive puts Proclamation No. 1388/2025 into practice. A foreign national must first get a permit from the Ministry of Urban and Infrastructure. The minimum capital depends on location: USD 150,000 in Addis Ababa and Sheger City, USD 120,000 in most other regions and Dire Dawa, and USD 100,000 in Afar, Benishangul-Gumuz and Gambella. The money goes into a blocked account, and each foreign national may buy only one residential house.
What this means for foreign buyers
The directive turns a general right into a step-by-step process. Plan the purchase in this order:
- Get the permit first. Do not sign a final sale agreement or pay a large deposit before the Ministry approves your application.
- Prepare the capital in foreign currency. The thresholds are in US dollars. The blocked account means the funds stay locked until the process allows their release. Ask your bank how long this takes and what fees apply.
- Choose one property with care. The one-house rule means you cannot spread risk across several units. Check the developer, the title and the lease terms before you commit.
- Understand the land rule. The reform does not create private land ownership. You buy the house, and the land stays under the lease system.
The lower thresholds outside Addis Ababa may attract buyers to regional cities. However, resale demand in those markets may be thinner. A low entry price does not guarantee an easy exit.
Our guide on buying property in Ethiopia as a foreigner covers the wider process. Our land lease guide explains what lease rights mean for a house owner.
Background
Parliament passed the foreign ownership proclamation in mid-2025. Until this directive, buyers and developers had the law but no clear procedure. Sheger City is the new city administration that surrounds Addis Ababa, so it shares the capital's higher threshold.