Registering Property in Ethiopia

Property Registration in Ethiopia

Below is a detailed summary of the steps, time and cost involved in registering property in Ethiopia.

It assumes a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small to medium sized domestic business in 189 economies.

Standard Property Transfer

Property value: ETB 540,018

City: Addis Ababa

1. Verify the owner of the property and obtain the Carta and plan at the sub-city office

Agency: Sub-City Office

Since 2005 the Land Registry has been decentralized into 10 sub-cities.

Due diligence is conducted at the sub-city where the warehouse is located.

This search will provide information on the owner of the building, date of construction of the building, the basic area of the property, whether the property is affected by encumbrances.

At the same time, the carta and plan of the warehouse will be provided; the buyer needs to submit the sale agreement to obtain them.

At the time of due diligence, the lawyer of the buying company will also check that the other company is properly registered.

4 days

200 ETB

2. Evaluation of the sale price by the sub-city

Agency: Sub-City Office

The parties will bring the sale agreement to the sub-city.

The sub-city official will check that the price included in the sale agreement corresponds to the Master list of price.

If the price in the sale agreement is greater than the Master list price, the greater price will be accepted.

If not, then the Master price will be applicable.

Each sub-city has a fee schedule depending on the location of the building.

In the event that the price in the sale agreement is not the same as the one indicated by the sub-city, Stamp duty will be paid based on the amount indicated by the sub-city and not on the amount written in the sale agreement.

1 day

no cost

3. The seller must obtain tax clearance from Tax Authorities

Agency: Tax Authority

The seller must obtain tax clearance on the property (not income tax) from Tax Authorities for transfer tax.

This institution has also been decentralized.

14 days

no cost

4. Payment of Stamp duty at the Land Administration Office

Agency: Land Administration Office

Stamp duty is set by Proclamation 110/1998.

Upon payment, the buyer will be given a receipt that he must bring back to the office of Documents Authentication and Registration.

In the case where the property is not registered in the property master list of the municipal land administration, a land survey is required.

1 day

2% of the property value for the Stamp duty and 4% of the property value for the ownership title transfer tax

5. Payment of capital gains tax at Inland Revenue Service

Agency: Inland Revenue Service

The seller pays the capital gain tax at the Customs and Inland Revenue Authority.

The tax amount is calculated based on a set scale.

1 day

not counted

6. Execution of the sale contract at the office of Documents Authentication and Registration

Agency: Office of Documents Authentication and Registration

The parties go to the office of Documents Authentication and Registration where they sign the sales agreement in front of the officials.

They must provide the following documents

-The seller gives the Title deed of the building

-A copy of the ID of both managers

-The power of attorney of each manager to ensure that they do have the power to sell/buy this warehouse at the specific amount.

-A copy of the Business License for each PLC.

1 day

10 ETB for the service charge + 51 ETB for the power of attorney

7. Apply for registration of property and obtain title deed in the buyer's name

Agency: Land Administration Office

The buyer company brings the authenticated sale contract to the Land Administration Office for the final transfer.

The buyer submits the authenticated agreement, the former title deed & ID card/Passport copy with the application for the title deed registration to the office of documents authentication and registration to avoid forgery.

The buyer also needs to place an ad in the newspaper declaring the purchase and asking anyone who objects to come forward. The notice period for the ad is 15 days.

Once this is lapsed, the buyer applies for transfer of deed.

30 days

ETB 100