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, construction date of the building, the basic area of the property, and 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.
Time and cost: 4 days, ETB 200 (200 ETB Fee)
Evaluation of the sale price by the sub-city
Agency: Sub-City Office
The parties will bring the sale and purchase agreement to the sub-city. The sub-city official will check that the price included in the sale agreement corresponds to the Master list 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, the stamp duty will be paid based on the amount indicated by the sub-city and not on the amount written in the sale agreement.
Time and cost: 1 day, no charge
The seller must obtain tax clearance from Tax Authorities
Agency: Tax Authority
The seller must obtain tax clearance on the property (from Tax Authorities for property transfer tax.
Time and cost: 14 days, no charge
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.
Time and cost: 1 day, ETB 59,833.49 (2% of the property value for the Stamp duty and 4% of the property value for the ownership title transfer tax)
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.
Time and cost: 1 day, no charge
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 sale and purchase 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 specified amount.
- A copy of the Business License for each PLC.
Time and cost: 1 day, ETB 61 (10 ETB for the service charge + 51 ETB for the power of attorney)
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. After the notice period, the buyer applies for the transfer of deed.
Time and cost: 30 days, ETB 100 (100 ETB Fee)
