Law and tax
Property tax and fees in Ethiopia: what buyers, sellers and landlords pay
A house sale in Addis Ababa usually carries a 2 percent stamp duty, a city transaction fee often reported at 4 percent, and a 15 percent capital gains tax on the seller's gain. A private home that the seller lived in for two years can be exempt from capital gains tax. Landlords pay income tax on rent, and owners now also face an annual property tax under Proclamation No. 1365/2025.
The city does not always use the price in your contract. It uses its own fixed value per square meter for many of these charges. This guide explains each tax and fee, who pays it and how to check the amount.
This guide is general information, not legal or tax advice. Rates change through new laws and city directives. Confirm every amount with the sub-city revenue office or a licensed tax adviser before you sign.
Summary of taxes and fees
| Charge | Typical rate | Who usually pays | When |
|---|---|---|---|
| Stamp duty on title registration | 2% of value | Buyer | At registration of the sale |
| City transaction fee ("Ashura") | Reported at 4% of value | Agreed between parties | At transfer |
| Capital gains tax on a building | 15% of the gain | Seller | Before transfer |
| Stamp duty on a lease registration | 0.5% of value | Lessee | At lease registration |
| Rental income tax | Graduated, up to 35% | Landlord | Annually |
| Annual property tax | Set by each region or city | Owner | Every year |
| Authentication and registration fees | Fixed by regulation | Usually buyer | At DARA and the land office |
| Broker commission | Negotiable | Agreed in writing | On completion |
Who pays a given charge is often negotiated. Write it into the sale agreement.
Taxes when you buy
Stamp duty
Stamp duty applies to the registration of title to property. The rate is 2 percent of the property value. The office collects it when you authenticate and register the sale.
A lease registration carries stamp duty of 0.5 percent of the value. This applies when you register a land lease or transfer similar lease rights.
The city transaction fee
Addis Ababa also collects a transaction fee on house sales. Lawyers and brokers often call it "Ashura" and report it at 4 percent of the value. The fee does not come from one clear federal law, and its basis can change. Ask the sub-city office for the current rate before you agree the price.
With stamp duty, this brings the transfer cost to about 6 percent of the official value. Buyer and seller often agree who pays which part.
The city's fixed values
Addis Ababa uses fixed values per square meter to calculate stamp duty, capital gains tax and the transaction fee. It does not simply accept the contract price. This stops buyers and sellers from declaring a low price to cut tax.
In April 2024 the city revised these values. The revision cut the values for condominiums and apartments by about 34 percent on average. The 2024 rates were:
| Property type | Fixed value per square meter |
|---|---|
| Apartments | ETB 48,180 to 81,798 |
| Condominiums | ETB 25,080 to 47,769 |
| G+0 villa without bricks | ETB 15,000 |
| G+0 villa with bricks | ETB 20,000 |
| Villa G+1 to G+5 | ETB 25,000 |
| Villa G+6 and above | ETB 30,000 |
Houses under construction are valued by their stage of work. The city can revise these values again, so ask for the current schedule.
Taxes when you sell
Capital gains tax
The Income Tax Amendment Proclamation No. 1395/2025 sets one rate of 15 percent on gains from shares, bonds and buildings. The gain is the sale value minus the cost basis.
A building is exempt if the seller held it and used it wholly as a private residence for two years before the sale. This exemption helps families who sell their own home. It does not help investors who rent out the unit.
The seller pays the tax before the land office transfers the title. Ask the revenue office how it calculates your cost basis. Keep the receipts from your purchase and from major improvements.
Tax clearance
The land office asks for proof that the property has no tax arrears before it transfers the title. This includes land lease payments and any annual property tax. Check this early. Unpaid lease balances are common on older plots.
Rental income tax
Landlords pay tax on rental income under the income tax law, as amended by Proclamation No. 1395/2025. The taxable amount is gross rent minus allowable deductions.
Individual landlords pay graduated rates. The 2025 amendment raised the thresholds for each band. Analysis of the amendment reports that the first ETB 24,000 of annual taxable rental income pays 0 percent and income above ETB 168,000 a year pays the top rate of 35 percent. Confirm the bands with the Ministry of Revenues or your tax office before you file.
Company landlords pay corporate income tax at 30 percent on their profit.
Points to note:
- Register your rental with the tax office and get a taxpayer number.
- Keep the lease contract and rent receipts.
- Rental contracts in Addis Ababa also fall under the rent law, Proclamation No. 1320/2024. Read our renting guide for the tenant side.
The new annual property tax
What the law does
Parliament ratified a federal property tax law in January 2025. It is published as Proclamation No. 1365/2025. It creates a modern tax on urban land and buildings. It replaces older and fragmented land and house taxes.
The law applies to urban areas across Ethiopia, including chartered cities. It covers residential, commercial, industrial and mixed-use property.
How it is calculated
- The tax base is a share of the assessed value. Capital Ethiopia reported that 25 percent of the property value is taxable.
- Reported rates are 0.2 to 1 percent for land and 0.5 to 1 percent for buildings.
- Regions and city administrations set the actual rates within the federal limits. They can also issue their own property tax laws.
- Municipal offices keep valuation rolls, assess each property and collect the tax.
Exemptions
The law exempts some categories. These include public service institutions, religious properties and low-income housing.
What it means for owners
Owners must register, declare and pay every year. If you buy a house, ask the seller for proof that they paid the property tax. Ask also how the city values the plot, because the value drives your yearly bill.
Valuation standards
Proclamation No. 1357/2024 covers real estate development, marketing and valuation. It sets rules for property valuers. Certified valuers do the assessments, and city or district authorities approve the final values.
Valuations serve many purposes: property tax, sales, bank collateral, court cases, inheritance, compensation and insurance. The government runs a general revaluation every five years. A party who needs a special valuation can ask for one and pays for it.
Valuers prefer the sales comparison method in active markets. They use an income method for rental property and a cost method for replacement value. Over time, these rules should bring official values closer to market prices.
Registration and authentication fees
Two offices handle most of the paperwork:
- The Documents Authentication and Registration Agency (DARA). It authenticates the sale agreement. Federal fees follow a regulation. The current fee schedule is Regulation No. 543/2024.
- The sub-city land office. It checks the title deed and the lease, collects the transfer charges and issues the new title in the buyer's name.
The land office calculates its title transfer fee from the plot size and the estimated construction cost. Ask for a written statement of all charges before you pay.
Broker commission
No national rule fixes broker fees in our sources. The commission is a private agreement. Proclamation No. 1357/2024 asks the Ministry of Urban and Infrastructure to license brokers and set standards for them.
- Agree the commission in writing before the first viewing.
- Agree who pays it: buyer, seller or both.
- Ask whether the broker has a license.
- Pay the commission only when the sale completes.
Lease costs
If the plot sits on leasehold land, the buyer takes over any unpaid lease balance. Under Proclamation No. 721/2011, the lessee pays the balance in equal annual installments with interest. Read our land lease guide for how lease payments work.
Worked example
Use this example only to see how the parts fit. The numbers are not real.
A buyer agrees to pay ETB 12 million for a 120 square meter apartment. The city's fixed value is ETB 60,000 per square meter, so the official value is ETB 7.2 million.
| Charge | Basis | Amount |
|---|---|---|
| Stamp duty at 2% | ETB 7.2 million | ETB 144,000 |
| Transaction fee at 4% | ETB 7.2 million | ETB 288,000 |
| Total transfer cost | ETB 432,000 |
The seller also pays capital gains tax on the gain, unless the home exemption applies. Authentication fees, title fees and broker commission come on top.
Practical tips
- Ask the sub-city revenue office for the current fixed value of the exact property.
- Get a written breakdown of every tax and fee before you pay the seller.
- State in the contract who pays each charge.
- Never declare a false price. The city uses its own values, and false papers can void the deal.
- Keep every receipt. You need them when you sell or send money abroad.
Ready to compare prices? Browse property for sale in Addis Ababa and follow our step-by-step guide on how to buy a house in Addis Ababa.
Frequently asked questions
What is the property tax in Ethiopia?
Proclamation No. 1365/2025 creates an annual tax on urban land and buildings. Regions and cities set the rates within federal limits, reported at 0.2 to 1 percent for land and 0.5 to 1 percent for buildings on a share of the value.
How much tax do I pay when I sell a house in Ethiopia?
The seller pays capital gains tax of 15 percent on the gain. A home the seller lived in for two years before the sale can be exempt.
What is the stamp duty on property in Ethiopia?
Stamp duty on the registration of title is 2 percent of the value. Addis Ababa also charges a transaction fee that is often reported at 4 percent.
How is rental income taxed in Ethiopia?
Individual landlords pay graduated rates on rent minus allowable deductions, up to 35 percent. Companies pay 30 percent corporate income tax on their profit.
Does Addis Ababa tax the price in my sale contract?
Not always. The city uses its own fixed value per square meter for stamp duty, capital gains tax and the transaction fee.
Who pays the transfer fees in an Ethiopian house sale?
The buyer usually pays stamp duty and the seller pays capital gains tax. Other fees are often negotiated, so write the split into the sale agreement.
Sources
- PwC Worldwide Tax Summaries: Ethiopia, other taxes
- Capital Ethiopia: Property tax law ratified despite concerns from parliamentarians
- DMLO: Property Tax Proclamation No. 1365/2025, legal analysis
- Dablo Law Firm: Addis Ababa implements revised fixed prices for house sales transaction tax
- Afriwise: Real property valuation under Proclamation No. 1357/2024
- Afriwise: Update on the new Ethiopian income tax amendment proclamation
This guide is general information, not legal, tax or financial advice. Rules and prices change. Confirm details with the relevant office or a licensed professional before you act.
