In Ethiopia, Acquiring and registering property isn’t an easy task. It costs lots of money and effort. One should also be careful of lots of cons and swindles by many parties in the process. Once the property to be acquired is found here are the lists of procedures to be followed to legalize the property.
1st The first procedure is Verifying the Status of the Property at the Registry. The purchaser should verify at the Registry whether the property is affected by any encumbrances. Currently the registry in Ethiopia is computerized and located in 10 different sub cities. Therefore two days time is enough for the verification. Then the location and surface area of the property must be checked at the Master plan Bureau. It requires one additional day.
2nd The second step will be Checking the Evaluation of the Sale Price by the Sub City. 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.
3rd The seller must Obtain Tax Clearance from Tax Authorities. This institution is also decentralized. It takes two days and utility clearance from the local water company is obtained in one day.
4th Then the seller must Obtain Energy Utility Clearance from the Local Water Company which takes one day.
5th Then the seller must Obtain Energy Utility Clearance from the Local Energy Company which takes one day.
6th Then the Capital Gains Tax at Inland Revenue Service must be paid which takes one day. The tax amount is calculated based on a set scale.
7th Then the parties request the Execution of the Sale Contract at the Office of Documents Authentication and Registration. At this stage the parties should bring the following them.
- I. Costs 10 ETB and 55ETB for power of attorney.
- II. The parties exchange the money in full for payment of the property.
- III. Each of them have to produce power of attorney authorizing him/her to sign the sale contract (not necessary if the owner of the land is the signing party) and
- IV. Two witnesses,
- V. A copy of the ID of both parties,
- VI. Copy of business license for each PLC, if appropriate
- VII. The seller must come up with the title deed of the building. The property registration fee is paid at the notary public
8th The buyer shall make payment of stamp duty at the Land Administration Office.
9th After this the seller and the purchaser have to Sign a Sale Contract before a Public Notary.
Here it should be noted that according to the current cassation court rulings a sale of an immovable will not be valid and binding, unless it is signed before a Public Notary. The process at the public notary is very short that One day are enough to complete the process.
10th Apply for the registration of property and obtain the title deed in the buyer’s name within 30 days time.
If you have an additional question or comment please Contact us.
Any pertinent information about investment in Ethiopia, tax in Ethiopia, can be available from an Ethiopian Investment Lawyer, Ethiopian Tax lawyer, Ethiopian, Ethiopian Employment Lawyer, Ethiopian Labour Relationships Lawyer, Ethiopian Immigration lawyer.