News
New laws, proclamations and regulations that change how Ethiopians and foreigners buy, sell and rent property.
Other topics:MarketMortgage and financeDevelopersHousing programsInvestmentTaxLand
· LEX Africa
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.
· Prime Business Africa
The National Bank of Ethiopia and the International Finance Corporation signed a framework agreement to create the country's first dedicated mortgage refinance company. Prime Minister Abiy Ahmed oversaw the signing. The proposed wholesale institution would have capital of 100 billion birr, with the IFC expected to contribute at least $200 million. It aims to fix the mismatch between banks' mostly short-term funding and the long-term financing that mortgages need.
· Addis Fortune
The Addis Abeba City Administration set an 11.5 percent annual cap on residential rent increases, effective July 8, 2026, the first day of the new fiscal year. The rule covers more than half a million registered tenants. The cap sits slightly above the 11.24 percent that a city-commissioned study found acceptable while inflation stays below 10 percent. Early 2026 data from the Ethiopian Property Centre put the average monthly rent for a city-centre studio at 45,000 Br.
· The Africanvestor
Ethiopia reformed its foreign property ownership regulations in 2025, shifting from highly restrictive rules to a regulated residential market. Foreign nationals can now legally purchase residential homes such as apartments, villas, and townhouses in eligible urban projects, provided they meet a USD 150,000 minimum investment threshold and obtain Ministry approval. Foreign buyers acquire only the residential structure itself, as the underlying land remains under Ethiopia's leasehold system rather than freehold ownership.
· The Reporter Ethiopia
Mayor Adanech Abiebie says Addis Ababa still owes nearly 30 billion Birr in housing-related debt, and this debt limits bank financing for new condominium projects. Speaking to the City Council, she said her administration inherited more than 60 billion Birr in condominium liabilities. The city has repaid around 60 billion Birr over time, but interest charges continue to grow.
· Capital Ethiopia
Ethiopia is currently hosting the inaugural Addis Africa Real Estate Exhibition, marking the first East African regional conference of its kind. Opened this Thursday, the dual-purpose program aims to harmonize policy frameworks across the Horn of Africa while positioning Addis Ababa as a premier continental hub for real estate investment.
· Capital Ethiopia
For years, Ethiopia's real estate sector, a multi-billion birr industry, has struggled with a lack of trust and inadequate legal frameworks. In response, the government is implementing an Escrow Account system aimed at securing home buyers' funds. This initiative is based on the recently ratified Real Estate Development and Immovable Property Marketing and Valuation Proclamation (No. 1357/2024), and seeks to restore trust and protect home buyers from exploitation by developers.
· Ethiopian News Agency
Housing developments across Ethiopia continue to enhance living conditions for families by expanding access to safe and durable homes that promote security, dignity, and stability. In a social media post, the Office of the Prime Minister said that despite persistently high housing demand, the Government of Ethiopia is implementing a broad range of interventions that combine formal housing delivery with targeted social support programs.
· The Reporter Ethiopia
The Ministry of Finance has exempted properties in Addis Ababa and Dire Dawa worth less than one million Birr from property tax. The threshold is 250,000 Birr in municipal cities and 100,000 Birr in emerging towns. Finance Minister Ahmed Shide sent a memo to city and regional administrations to clear up confusion over implementation and rates under the Property Tax Proclamation. The ministry defines a low-income household as one with proven economic hardship and annual income of no more than half the national average per capita income.
· Ethiopian News Agency
Ethiopia is making strides in ensuring affordable housing and strengthening urban resilience through various mechanisms, according to the Ministry of Urban and Infrastructure. Addressing a high-level panel on housing in Ethiopia and across Africa, Urban and Infrastructure State Minister Hellen Debebe said the Government of Ethiopia has been conducting different housing provision mechanisms to alleviate the housing problem.
· Addis Fortune
Addis Ababa has approved a 350 billion Birr budget for fiscal year 2025/26, the first entirely without federal government transfers, marking a 45.1 percent increase and a shift toward municipal self-reliance. The budget projects a 117 percent revenue increase and allocates over 70 percent of funds toward capital projects. Critics raise concerns about the feasibility of aggressive revenue targets and potential debt risks from unchecked municipal borrowing.
· Addis Fortune
Addis Abeba's City Revenue Bureau has implemented a directive requiring roughly half a million property owners to register leases, conduct rent payments through formal banking channels, and apply a 35 percent flat deduction on gross rental income before tax assessment. Authorities say the overhaul addresses chronic underreporting and cash-based transactions in the informal housing market. Landlords and advocacy groups have challenged the system, citing vague guidelines, retroactive penalties, and concerns about market destabilization amid rent increases of 40 percent over three years.
· Ethiopian News Agency
Ethiopia's House of People's Representatives approved legislation during its 41st regular session allowing foreign nationals to own residential real estate in the country. The proclamation aims to boost investment flows, revitalize the real estate sector, and generate employment opportunities while protecting national interests and ensuring compliance with Ethiopian law. The body simultaneously approved a revised overseas employment proclamation addressing gaps in existing regulations.
· Birr Metrics
Ethiopia has approved a law granting foreign nationals the right to own immovable residential property, marking a notable shift in its tightly controlled land and investment policy as the government seeks to attract more foreign capital. Passed by the House of People's Representatives on June 24, the new law permits foreigners to purchase homes valued at a minimum of 150,000 US dollars.
· Capital Ethiopia
A draft law that would let foreigners own housing or acquire land for construction has raised fears that home prices could rise further and put homes out of reach for local residents. The government says the draft would meet rising housing demand and attract foreign investment. Estimates say Ethiopia needed roughly 471,000 new homes per year between 2015 and 2025 to close its housing gap.
· LEX Africa
Ethiopia's Council of Ministers has approved a draft proclamation establishing a legal framework allowing foreign nationals to acquire immovable property under specified conditions, a significant departure from the country's historical restriction limiting property ownership to the state and citizens. The framework permits foreign nationals to acquire residential property through leasehold or outright ownership, provided they meet a minimum investment threshold of USD 150,000 per transaction and comply with safeguards overseen by the Ministry of Urban and Infrastructure.
· Fana Media Corporation
The House of People's Representatives ratified the property tax proclamation by majority vote during its 15th regular session. The Council of Ministers had forwarded the bill to parliament on June 14, 2024. The law aims to distribute wealth more equitably among urban residents, improve government services and fund urban infrastructure through taxes tied to rising property values. It applies to cities nationwide, and regional states can issue their own property tax laws under it.
· EBC
Ethiopia is taking a bold step towards regulating its real estate sector with a new draft law that aims to protect buyers and promote responsible development. The law proposes a licensing requirement for developers, ensuring only qualified individuals are involved. It also mandates escrow accounts for funds collected from buyers, preventing developers from misusing the money.
· Addis Insight
Is Ethiopia’s Real Estate Losing its Balance? With a series of impactful economic reforms, Ethiopia’s business environment is undergoing a significant transformation, impacting virtually all sectors. One of the most affected is the real estate sector, which is navigating a complex landscape marked by both opportunity and constraint. The recent shift to a market-based foreign exchange rate has led to increased costs for imported construction materials and machinery, along with fluctuations in the value of the USD against the birr.
· The Reporter Ethiopia
Ethiopia's long-awaited real estate legislation has reached Parliament after a decade-long delay. The proposed proclamation establishes minimum development standards, including a 50-unit minimum for developer licensing and a requirement that 40 percent of units be affordable housing. The law aims to protect homebuyers through measures restricting developer access to property deeds and requiring advance payments be held in controlled accounts.
· Ethio Real Estate
The Ethiopian government is set to implement additional taxes on real estate and vehicles, as outlined in the latest Home Grown Economic Reform documents. This new real estate tax will complement the existing property tax legislation currently undergoing legal and administrative procedures, with implementation slated for either 2024 or 2025.
· Addis Fortune
Ethiopia's Ministry of Urban and Infrastructure is developing a 51-page standardized manual for property valuation across the nation's 2,500 cities, aiming to create uniform land-grading criteria to replace inconsistent municipal approaches ahead of a property tax rollout. Five property grades will be assigned based on aggregate scores out of 100, considering infrastructure access, construction materials, plot size, and population density. Some officials and academics question the feasibility of imposing property taxes while land remains under government ownership.
· Addis Fortune
Addis Ababa's city administration announced plans to resume its land lease program, making 100 plots available through auction, with Mayor Adanech Abiebie making the announcement at the inauguration of apartments built by Al-Sam Properties. The city had suspended regular land auctions for over two years to combat illegal transfers and speculation. The mayor encouraged developers to complete projects promptly and avoid land hoarding.