Registering Property in Ethiopia

This topic examines the steps, time, and cost involved in registering property in Ethiopia.

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Property Value: ETB 152,325
City: Addis Ababa

	Procedure	Time to complete:	Cost to complete:
1	Verify the owner of the property and obtain the Carta and plan at the sub-city office	2 days	200 ETB
2	Evaluation of the sale price by the sub-city	1 day	no cost
3	The seller must obtain tax clearance from Tax Authorities	2 days	no cost
4	Obtain water utility clearance from the local Water Company	1 day	no cost
5	Obtain energy utility clearance from the local Energy Company	1 day	no cost
6	Payment of capital gains tax at Inland Revenue Service	1 day	not counted
7	Request the execution of the sale contract at the office of Documents Authentication and Registration	1 day	10 ETB for the service charge + 55 ETB for the power of attorney
8	Payment of Stamp duty at the Land Administration Office	1 day	2% of the property value for the Stamp duty
9	Execution of the sale contract at the office of Documents Authentication and Registration	1 day	Already paid in previous procedure
10	Apply for registration of property and obtain title deed in the buyer’s name	30 days	Included in previous procedures

Procedure 1.: Verify the owner of the property and obtain the Carta and plan at the sub-city office
Time to complete:: 2 days
Cost to complete:: 200 ETB
Name of Agency:: Sub-City Office
Comment:: Since 2005 the Land Registry has been decentralized into 10 subcities. 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. At the time of due diligence, the lawyer of the buying company will also check that the other company is properly registered.

Procedure 2.: Evaluation of the sale price by the sub-city
Time to complete:: 1 day
Cost to complete:: no cost
Name of Agency:: Sub-City Office
Comment:: 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. 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.

Procedure 3.: The seller must obtain tax clearance from Tax Authorities
Time to complete:: 2 days
Cost to complete:: no cost
Name of Agency:: Tax Authority
Comment:: The seller must obtain tax clearance on the property (not income tax) from Tax Authorities for transfer tax. This institution has also been decentralized.

Procedure 4.: Obtain water utility clearance from the local Water Company
Time to complete:: 1 day
Cost to complete:: no cost
Name of Agency:: Local Water Company
Comment:: The seller must obtain water utility clearance from the local Water Company.

Procedure 5.: Obtain energy utility clearance from the local Energy Company
Time to complete:: 1 day
Cost to complete:: no cost
Name of Agency:: Local Energy Company
Comment:: The seller must obtain energy utility clearance from the local Energy Company.

Procedure 6.: Payment of capital gains tax at Inland Revenue Service
Time to complete:: 1 day
Cost to complete:: not counted
Name of Agency:: Inland Revenue Service
Comment:: The seller pays the capital gain tax at the Customs and Inland Revenue Authority. The tax amount is calculated based on a set scale.

Procedure 7.: Request the execution of the sale contract at the office of Documents Authentication and Registration
Time to complete:: 1 day
Cost to complete:: 10 ETB for the service charge + 55 ETB for the power of attorney
Name of Agency:: Office of Documents Authentication and Registration
Comment:: The parties go to the office of Documents Authentication and Registration. The buyer is given a slip on how much to pay and which account this amount should be deposited into.
The parties 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.

Procedure 8.: Payment of Stamp duty at the Land Administration Office
Time to complete:: 1 day
Cost to complete:: 2% of the property value for the Stamp duty
Name of Agency:: Land Administration Office
Comment:: 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

Procedure 9.: Execution of the sale contract at the office of Documents Authentication and Registration
Time to complete:: 1 day
Cost to complete:: Already paid in previous procedure
Name of Agency:: Office of Documents Authentication and Registration
Comment:: Payment is done at the municipal tax office.

Procedure 10.: Apply for registration of property and obtain title deed in the buyer’s name
Time to complete:: 30 days
Cost to complete:: Included in previous procedures
Name of Agency:: Land Administration Office
Comment:: The buyer company brings the authenticated sale contract to the Land Administration Office for the final transfer. This can take up to 1 month or even more to obtain the new deed.