Property Tax in Eritrea

Property taxation in Eritrea includes taxes on property acquisition, ownership, and disposal. This guide covers the various property-related taxes and duties that property owners and investors need to understand.

Property Acquisition Taxes

Registration Duties

When purchasing property in Eritrea, buyers are required to pay registration duties. These are calculated on the purchase price or the market value assessed by the tax authorities.

• Standard Rate: ~4% of property value
• Agricultural Land: 2% of purchase price

Notary Fees

Notary fees for property transactions are typically 1–2% of the purchase price and are shared between buyer and seller as agreed.

Annual Property Taxes

Annual Property Tax

An annual property tax is levied on built-up properties in urban areas:

• Rate: ~0.5% of property value
• Exemptions: Government buildings, diplomatic missions, religious buildings

Property Disposal Taxes

Capital Gains on Property

Gains from the sale of property are subject to a 15% capital gains tax. This applies to both individuals and corporations.

• Individuals: 15% CGT on property gains
• Corporations: Gains taxed at standard CIT rate of 30%
• Primary Residence: May be exempt under certain conditions

Rental Income Taxation

Rental income from property is taxable as follows:

• Individuals: Net rental income taxed at progressive PIT rates (0–38%)
• Corporations: Included in business income, taxed at 30% CIT

Tax Planning for Property Investors

• Hold Property Through a Company: May provide tax advantages for corporate investors
• Mortgage Interest Deduction: Interest on property loans is deductible against rental income
• Joint Ownership: Consider ownership structure to optimize tax outcomes