Taxes on predetermined prices in Addis Ababa

The Addis Ababa City Administration has implemented a new taxation procedure in response to the inadequacy of the previous method in aligning with current market prices. This adjustment aims to prevent potential revenue losses for the government in real estate transactions.

It remains uncertain whether the new procedure will have a positive or negative impact on the real estate market in the future. This newsletter aims to provide insight into the newly established pricing system.

The revised tax scheme relies on predefined square meter sale prices established for various site levels ranging from 1 to 5. Specifically, for apartments, the predetermined sale price per square meter falls within the range of 73,000 ETB to 123,937 ETB, whereas for condominiums, it spans from 38,000 ETB to 72,377 ETB. You can refer to Figure 1 for a visual representation of the predetermined sale prices across different site categories.