Ethiopia Property Tax Proclamation No. 1365/2025

 

 Key Summary of the Proclamation:

1. Purpose of the Proclamation

• To collect more revenue: The previous land rent and building tax system could not generate enough revenue for rapidly growing urban areas:
• Ensure fair wealth distribution among urban residents.
• Capture revenue from increasing property values.
• Finance urban infrastructure and public services sustainably.
• Establish a transparent, efficient, and market-based national property tax system.

2. Scope of Application

• Applies to urban areas across Ethiopia (Addis Ababa, Dire Dawa, and all regional urban areas)

3. Targeted properties for Taxations:

• Urban land under:
  • Lease rights
  • Old possession rights
• Buildings:
  • Residential
  • Business
  • Commercial
  • Public-use
• Land improvements:
  • Roads, parking, pavements, markets, etc.
• Condominiums (apartments) and common areas

4. Tax Exempted Properties: 

• A residential building used as a dwelling by a low-income family
• land holding and building used by religious institutions for religious and cemetery purposes
• urban land wholly used for agricultural purposes
• land and buildings used by organizations that provide free social services to the public for that service.
• Land uses and buildings owned by the organs of the federal government, bilateral or multi-lateral intergovernmental organizations and properties dedicated for public use

5. Property Valuation Method

• Property is assessed based on market value, considering:
  • Sale prices of similar properties
  • Location
  • Size and condition
  • Improvements made
  • Current market conditions

6. Taxable Value and Tax rates

• Tax is not charged on full market value
• It is only on 25% of the market value is taxable. This 25% is called the taxable value
• The urban land use tax rate shall be calculated on the taxable value of the land and shall not be less than 0.2% and more than 1% of the taxable value
• The tax on buildings and/or on land improvement shall be calculated on the taxable value of the building or improvement and shall not be less than 0.1% and more than 1% of the taxable value

Example: If the Building is valued at 1 million, then

• Market value: 1,000,000 Birr
• Taxable value: 250,000 Birr
• Minimum Tax: 250 Birr
• Maximum Tax: 2,500 Birr

7. Key words

Urban Area; Property; Property Tax; Market Value; Taxable Value; Property Valuation; Valuation Roll; Land use Right; Leasehold Land; Old Possession Right; Residential Building; Commercial Building; Business Building; Land Improvement; Condominium; Municipal Revenue;

8 Entry into Force: March 26, 2025

9 Repeals:

• Other than those relating to urban land rent, the provisions of Urban Land Rent and House Tax Proclamation No. 80/1976Articles 8 to 14 of the Urban Zoning and Building Permit Proclamation No. 316/1987
• Urban Land Rent and Urban Houses Tax (Amendment) Proclamation No. 161/1979

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10 Amended by: 

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11 Implemented by: —

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12 Repealed? No

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Download (PDF):Ethiopia Property Tax Proclamation No. 1365/2025

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