Addis Abeba — The House of People's Representatives has approved a landmark proclamation allowing foreign nationals to own immovable residential property in Ethiopia in a major shift to ownership and investment policy.
The bill was first approved by the Council of Ministers in May this year in what was framed as part of a broader effort to attract foreign capital, address housing demand, and spur job creation- without undermining Ethiopian citizens' rights to own and use property and to "regulate the ownership and use of immovable property by foreign nationals."
The bill, presented by the House's Standing Committee on Urban, Infrastructure and Transport Affairs, was discussed and passed on 24 June. While the new law opens the door for foreign ownership of homes, it maintains Ethiopia's longstanding constitutional clause that "land remains the collective property of the people and the government." Foreign nationals, therefore, may own residences, but not the land itself, and are barred from selling or transferring it independently.
Professor Mohammed Abdo, chair of the Standing Committee, said the proclamation is aimed at encouraging foreign investment in Ethiopia's housing sector without compromising domestic land ownership rights. He noted that a minimum investment threshold of $150,000 has been set for foreign nationals seeking to purchase residential property.
Follow us on WhatsApp | LinkedIn for the latest headlines
Regardless, some lawmakers voiced concern that the threshold might be "too low," potentially opening the door to "uncontrolled influx" of foreign nationals. In response, Professor Mohammed insisted that the law's provisions are limited to the investor and their immediate family- namely spouses and children - and would not result in a significant increase of foreign nationals' property ownership. He also indicated that the minimum investment requirement could be adjusted in the future "in line with market conditions."
The Standing Committee further explained that foreign investments outside the capital Addis Abeba will be governed by "regional policy implementations", with regional states developing their own enforcement guidelines.
Under current laws, foreign nationals are prohibited from owning immovable property in Ethiopia, including residential and commercial buildings. If fully implemented, the new proclamation represents a significant shift in the country's investment and property ownership landscape.
The move also aligns with Prime Minister Abiy Ahmed's broader economic agenda. In March, during a meeting with Ethiopia's largest taxpayers, the Prime Minister revealed the government's intention to liberalize real estate ownership for foreigners, alongside plans to open up the retail sector.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
