The Addis Ababa City Administration released a new floor price for plots in the city this week after revising the existing lease rate according to the market price. The new prices will be used as a benchmark for plots that are going to be auctioned by the city government or transferred under the new “Urban Lands Lease Holding Proclamation.”
The new prices range from 1,686 birr per square meter designated as central market places to 191 birr that are grouped as expansion places in the city.
The new regulation classified the city into three zones. The first Zone is Central Market District Zone, which is classified in five sets, the first level plot to have a floor price of 1,686 birr per square meter. The second level is set to be 1,535 birr per square meter, 1,323 birr per square meter for a third level plot, 1,085 birr per square meter for a forth level plot and 894 birr for the fifth level plot.
The rate for Central Market District Zone will be applicable in most areas of the city that are considered to be main business areas that entertain high level of business activities.
The second zone, Transitional Zone, will also have five levels. The first level will have a floor price of 1,035 birr per square meter, 935 birr per square meter for the second level, 809 birr per square meter for the third level, 685 birr per square meter for the fourth level, and 555 birr per square meter for the fifth level. This zone includes places that are surrounding the city and are occupied by mainly residential units and industries.
The last and the third zone, Expansion Zone, is classified into four levels and covers areas that are considered to be in the outskirts of the city, where the city is expected to expand in the future.
The first level on this zone will have a floor price of 355 birr per square meter, 299 birr per square meter for the second level, 217 birr for the third level and the last and fourth level will have a floor price of 191 birr per square meter.
As of next week, sub cities that have suspended transaction of property transfers waiting for this regulation will resume their work.
According to the lease policy, someone who leased a plot will have to pay a 20 percent down payment when they receive the land and the rest will be paid according to the agreement that varies from 60 to 99 years.
The regulation that takes effect as of May 23, 2012 will be applied on new land auction and property transfers that are going to fall in the new land lease proclamation published in the Federal Negarit Gazeta of the FDRE on November 28, 2011.
Part two article 5 of the proclamation states “…. No person may acquire urban land other than through the lease holding system …”. Article 6 on conversion of old possessions to lease holding sub article 1 states “the modality of converting old possession into lease hold shall be determined by the Council of Ministers on the basis of a detailed study to be submitted by the Ministry; provided however, that the process of such a study may not preclude a revision of the existing rental rate applicable to old possessions.”
The regulation released by the Council of Ministers’ states that no person except through inheritance, can own a plot without lease.