· The Reporter
Regional Delays, Fragmented Collections Hamper Ethiopia’s Property Tax Overhaul: Report
Topics:TaxLaw and policy
Summary of the The Reporter report
A report by the Institute for Fiscal Studies says Ethiopia's property tax reform is stuck. The federal proclamation of 2025 sets the taxable value at 25 percent of market value, but no region or city has passed the law that sets its rates. Cities such as Addis Ababa still collect the old roof and wall tax.
Key points
- An Institute for Fiscal Studies report says no regional state or city administration has enacted the law needed to apply the new property tax.
- Property Tax Proclamation No. 1365/2025 sets the taxable value of a property at 25 percent of its market value.
- Cities and municipalities, including Addis Ababa, still collect the roof and wall tax under older rules.
- The report says indirect taxes fell from 6 percent of GDP in 2014/15 to 2.5 percent in 2023/24.
Real.et analysis
The Reporter reports that no regional state or city administration has passed the law it needs to apply the new federal property tax. The finding comes from a report by the Institute for Fiscal Studies (IFS), a research institute in the United Kingdom. The federal government enacted Property Tax Proclamation No. 1365/2025 in 2025. Under it, the taxable value of a property is 25 percent of its market value. Regions, city administrations and municipalities then set the rate inside a minimum and a maximum.
The IFS report says most cities do not have a unified system. Cities and municipalities, Addis Ababa included, still collect the old "roof and wall" tax under outdated rules.
What this means for owners
The federal law exists, but the report says the local laws that set the rates do not. So the amount you will pay under the new system is not yet fixed. Three points to watch:
- Your city's proclamation. The rate for your property depends on the law that your region or city passes. Watch for the rate and the start date.
- The valuation. The tax base is a quarter of market value. Ask how the city values your property and how you can contest the result.
- Your records. Keep the receipts for the roof and wall tax you pay now. You may need them when the system changes.
What this means for buyers
Unpaid tax can delay a transfer. Before you buy, ask the seller for proof that the annual property tax is paid. Add a future property tax to your yearly cost of ownership. It could be higher than the present charge when the new rates apply.
Background
The report also places property tax in a wider picture. It says Ethiopia had the sharpest fall in tax revenue relative to the size of its economy of any country between 2014/15 and 2023/24. Indirect taxes fell from 6 percent of GDP to 2.5 percent in that period.
Our guide to property tax and fees in Ethiopia explains the present charges. Read how lawmakers ratified the property tax proclamation and how the Finance Ministry set exemptions.