Ghana’s New Real Estate VAT Regime: What You Need to Know

Starting January 1, 2026, Ghana is implementing a significant change to its tax structure for real estate. The new VAT Act (Act 1151) replaces the previous 5% flat rate for estate developers with a unified system that carries an effective tax rate of 20%.

Understanding the 20% VAT Breakdown

The new rate is not a single tax but a harmonization of several levies:

VAT Rate: 15%
NHIL (National Health Insurance Levy): 2.5%
GETFund Levy: 2.5%

Total Effective Rate: 20%

This tax applies to all residential and commercial property sales made by VAT-registered developers.

Key Policy Details for Property Buyers

Applicability: VAT is not universal. It depends on the nature of the development, the property's use (residential, commercial, hospitality, etc.), and the VAT status of the developer.

Effective Date: The regime applies to transactions and balances occurring after January 1, 2026.

Pre-2026 Payments: Any payments fully received before January 2026 are not subject to the new regime.

Installments: VAT is applied only to the outstanding balance payable after the effective date. It is generally charged proportionately to your payment plan rather than being deferred to completion.

Fees: Reservation fees are considered part of the total consideration and are subject to VAT.

The Devtraco Advantage: Offsetting the Tax Impact

While the 20% rate applies across the industry, Devtraco Group is taking steps to provide superior value to its clients:

Absorbing Costs: For specific projects like Arlo, the company has made a commercial decision to absorb 6% of the VAT, leaving clients responsible for only 14%.

Integrated Infrastructure: Unlike standalone developments, a 20% VAT investment at Devtraco includes access to on-site police and fire stations, tarred roads, street lighting, and schools.

Professional Management: Through its subsidiary, Elan Ghana Property Services, Devtraco ensures properties are maintained via ISO-standardized processes to prevent depreciation.

Financing Power: Devtraco properties are recognized by financial institutions as prime collateral, making it easier for buyers to secure mortgages and credit.

Compliance and Next Steps

VAT is a statutory requirement and is not optional under Ghanaian law. Official invoices and statements will now clearly itemize VAT as a separate line item showing both percentage and monetary value.

If you have questions regarding an existing contract or a future purchase, please contact your assigned Sales Consultant for a transparent discussion on payment timelines and documentation. Download presentation here.