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The New/Revised Property Tax in Ethiopia: What You Need to Know

POSTED ON SEPTEMBER 16, 2023 BY E4LVW

The Addis Ababa City Administration has recently introduced revised property tax rates, signaling a
significant leap in revenue generation. With plans to collect up to nine billion Birr in the upcoming
budget year, the new property tax system is poised to make a substantial impact. In this blog post, we
will explore the key aspects of the revised property tax in Ethiopia and discuss its implications for
taxpayers and the city’s finances.

Understanding the Calculation:

The property tax calculation is based on multiplying the square meter of the property by the per square
meter monthly rent, and then multiplying it by 12 and the tax rate of the annual rental value. Originating
from Proclamation No 80/1976, the property tax system has undergone revisions to better align with
current market conditions. Urban land rent has been assessed using fixed rates per square meter since
1975, categorized according to land size or use.

Revised Rates and Categorization:

The new property tax rates have been introduced without requiring amendments to existing
proclamations or regulations. The Addis Ababa City Government has categorized land into three grades
(1, 2, and 3&4) and further differentiated residential buildings based on their construction materials.
Residential and commercial properties have different rates per square meter, depending on the grade
and type of construction material.

Addressing Concerns and Future Implications:

While the revised property tax rates aim to meet the government’s increasing financial demands, there
are concerns about the sudden increase in taxpayers’ obligations. Additionally, fears of rising rents and
property prices due to the new tax system have surfaced. It is crucial for the government to address
these concerns and ensure that taxpayers can adapt to the changes smoothly. Furthermore, providing
legal backing for the research findings through amendments to existing laws would solidify the revised
property tax rates.

Conclusion:

The new/revised property tax in Ethiopia signifies a significant step towards enhancing revenue
generation for the Addis Ababa City Administration. As taxpayers navigate the updated tax obligations
and potential impacts on rents and property prices, careful consideration and proper support from the
government will be essential. With these measures in place, the city’s revenues can be bolstered while
ensuring a fair and sustainable property tax system for all stakeholders involved.

Seeking expert guidance on Property Tax matters in Ethiopia? Our experienced lawyers in Ethiopia offer
comprehensive legal services to protect your rights. Contact us today for a consultation.”

DISCLAIMER:

Please note that this guide aims to provide important information on Ethiopian Property Tax and
practice. It is not intended to replace or substitute professional advice tailored to the specific
circumstances of each case and expertise in Ethiopian law, which may be provided by a Lawyer in
Ethiopia. For comprehensive and accurate information regarding investment in Ethiopia, we strongly
recommend consulting an Ethiopian Property Tax Lawyer.