Understanding Tax Obligations in Real Estate Transactions

The article examines Ethiopia's real estate tax framework, which operates primarily through contractual arrangements between developers and buyers without comprehensive regulation. It outlines major tax obligations including capital gains tax (15 percent), value-added tax (15 percent), withholding tax (2 percent for business entities), and stamp duty (2 percent), plus city administration fees ranging from 4 to 19 percent depending on property type. The piece notes that tax burdens can be shifted contractually between parties.