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Context and background: Real Property Valuation is the most essential activity in administering land and other real properties. Undertaking valuation is also important to enhance revenue of the country. Different types of property valuation methods applied on the basis of property type and purpose of valuation. Conducting systematic valuation is the base for levying tax. Lack of policy in land, depending on one type of valuation method, shortage of skilled man power and widespread tradeoffs around land sector are the major problems resulted in maladministration of valuation in Dire Dawa City.Goal and Objectives:Thus, this study was intended to assess the practice of real property valuation and tax liability in the study area.Methodology:The researcher employed a descriptive research design and applied mixed research approaches. The findings reveal that, the study area employs only replacement cost approach. Due to knowledge gap on how to estimate tax exempt property and shortage of skilled experts, revenue from property were lagging behind in supporting the economy. Tax amount was determined by traditional approaches with high discrepancies’ with International Valuation Standards. Results:Thus, taking measures like formulating land policy, applying different valuation approaches, applying systematic tax base are suggested to tackle the problem.
