House Sales in Addis Ababa to Be Taxed at Predetermined Prices
The Addis Ababa City Government has set a fixed price per square meter for house sales in an effort to collect all revenue generated by the city, in line with recent tax reforms.
Under the new valuation, the government will estimate that a house is sold at the predetermined sale price. The sale price for condominiums ranges from ETB 54,511.81 to 72,377.44 per square meter, depending on the classification. Apartments are estimated to be in the range of ETB 85,000 to 132,937.50 per square meter. Other houses are estimated to have a construction price of ETB 30,000 per square meter and ETB 19,175.93 to 61,369.00 per square meter for use rights.
The government will implement this new formula to impose taxes on the sale of houses including capital gain tax of 15%, VAT (15%), stamp duty (2%), profit income tax, and “Ashura” at the rate of 4%.
Therefore, a seller and a buyer may agree on any sales price in their sales contract, but the contract will only be valid if it is submitted to the Federal Document Authentication and Registration Service. If the sales price agreed upon by the parties is lower than the predetermined price set by the government, then for tax purposes, it will be assumed that the sale took place at the government’s predetermined price.
Source: WZ News