Officials of the Ministry of Urban Development & Infrastructure have proposed a bill to out source the responsibility of property valuations from federal institutions to private property valuators.

The move comes at a time when federal authorities are determined to pass a law on property tax and hope to alleviate the burden on federal agencies struggling to decide on property values. Public discourse on the bill has been going on over the past two weeks. Private valuators, specialising in industrial, residential, or commercial properties, would ease the federal institutions' workload, according to Adane Egzie, head of the real property, market and valuation permit team at the Ministry.

"This is an initiative designed to improve the quality and protect the interests of property owners and financial institutions," Adane said.

The bill, under review at the Ministry of Justice, prescribes that city administrations and regional states would issue permits to the valuator after training and tests. It aspires to create a system where private valuation experts are not only trained but also held to a high standard, with their licenses up for review every three years. The existing setup has companies labelled as property valuators renewing their licenses as construction consultants, creating gaps between market prices and official valuations.

The prevailing system, plagued by insufficient qualified valuators, often results in misleading property valuations, causing conflicts between property owners, lenders, and state institutions. Although 250 consulting companies operate nationwide, none are designated explicitly as property valuators. Instead, companies labelled as property valuators renew their licenses as construction consultants, according to Abebe Banjaw, director of building regulation at the Ethiopian Construction Authority (ECA).

The Addis Abeba Construction Regulatory Authority recently amended building valuation rates to reconcile these disparities before transferring title deeds.

Nebiyu Wolde, leader of the Lideta District's resettlement project, expressed hope that outsourcing valuation processes to field experts would speed up compensation appraisals for residents displaced by development projects.

Industry insiders have praised the bill as a positive step towards enhancing the property valuation market, benefiting owners and lenders through reliable assessments. Banks have departments with engineers doing property rate valuations before loan approvals or foreclosure upon defaults. Their executives have welcomed the bill.