A Guide to Property Tax in Ghana

Jan / 19 / 2018

Property Tax sounds like another daunting way for the Government to take away your hard earned cedis. We have a simple guide to what exactly you are being taxed on, when it comes to your property.

Property taxes in Ghana, popularly known in Ghana as property rate, paid on immovable property, is collected annually under the auspices of the Ghana Internal Revenue Service. In Ghana property tax is levied annually by local authorities on the estimated value of the property, depending on the classification of the area where the property is located. The rates range from 0.5% to 3%. There are also different types of property tax, namely: property rates, ground rates and the actual property tax.

Ground Rent

This is paid to the Stool/Skin Lands Commission, in the case of the property belonging to the Skin/Stool for disbursement among the legitimate traditional owners; or to the Lands Commission for disbursement to the rightful owners. This is paid annually on residential and commercial real estate.

Property Rate
This is a levy paid to the District Assembly. It is paid annually on both residential and commercial real estate.

Real Estate VAT
In 2015, the government introduced a new tax on the real estate industry. This tax, is meant to be an indirect form of Valued Added Tax (VAT). The initial plan was to charge real estate developers 17.5 percent VAT. However upon deliberation with the various stakeholders in the industry, this was pegged back to five percent. Even though this new tax has divided opinions, it is expected that the low rate charge will help stakeholders and the general public come to appreciate the long-term benefits of the new tax.

Property Tax
Property tax is the levy charged on the estimated value of a property. This tax falls under the jurisdiction of the local assembly. In Accra, the Accra Metropolitan Assembly is the institution tasked with the collection of property tax. Due to Accra's differing demographics, the Assembly has categorized them into zones, charging each zone according to the valuation of the area. For instance, a property located in Airport Residential Area would be made to pay at least GHC115 while one located in Kisseman would pay a minimum of GHC30. The determination of the property rate is however dependent on the determination of each property's estimated value, meaning some rates may be higher than others, even within the same enclave.

Paying your taxes does not have to be a dreaded task. Being aware of the purpose of these taxes helps potential buyers and home owners be mindful of what their tax revenue is being used for. Examples of the uses of property tax include the construction of hospitals, roads, schools, etc. The breakdown of these taxes also makes it to clear to the tax payer, who exactly is collecting these taxes.

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