What You Need to Know About Local Property Taxes in Ghana

Learn about the property tax system in Ghana and how it affects you as a resident or real estate agent.

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What You Need to Know About Local Property Taxes in Ghana
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Taxes are a burden for anybody, but when you’re abroad, it can feel especially unfair. However, the truth is that some countries collect taxes on property even if you don’t live in their country. Here’s what you need to know about local property taxes in Ghana.

 

If you are planning to buy property in Ghana and reside outside of the country, be sure to check with your tax advisor before signing any contracts or making any payments. They will be able to give you information on the type of residence income tax and municipal tax that will apply to your purchase. This is important because while landlords are expected to pay these taxes, not all do so fully or on time. If you plan might not have a good relationship with your landlord or they are not paying their taxes, this could complicate things for you later on down the line.

 

Local property taxes in Ghana

One of the things you need to be aware of when purchasing property in Ghana is that it’s possible to be charged taxes on your property even if you live outside of the country. For example, if a Ghanaian resident lives in France and buys a piece of property in Ghana, they will be subject to local property taxation. This can make things difficult for foreigners looking to buy properties abroad because it’s important to understand what type of taxes apply before signing any contracts. Many do not know that they are being taxed because their landlord doesn’t pay their taxes fully or on time.

 

Conditions of residence income tax

The conditions of residence income tax are that you must be a resident of Ghana, and have to be earning an income from within Ghana for at least six months before you can charge the tax. You need to file a “Resident Income Tax Return” with the Ghana Revenue Authority in order to pay this tax.

 

Conditions of municipal taxes

for non-residents

Municipal taxes for non-residents are a little different than they are for residents. You will need to apply to the municipality where you are purchasing property and you will be subject to the same rules as any other resident of that municipality. For example, if you purchase property in Accra, which has a 3% municipal tax rate, you would be obligated to pay 3% on your rental income earned from the property.

 

What is the penalty for late payment?

Just like in the United States, there are penalties for late payment of taxes in Ghana. If you fail to pay your taxes on time in Ghana, you could face fines from the government.

If you are a foreigner, this is also true of any taxes that are levied on your property purchase. You could be subject to a fine of up to 10% of the total value of the property if you do not pay your taxes and fines by the due date.

 

The penalty for late payment for residence income tax

The penalty for late payment for residence income tax is 10% per annum on the unpaid amounts. If you are a landlord, and you know that your tenant will be living in your house outside of Ghana but you are not paying taxes on their behalf, then you should be aware of this penalty as well. If your tenant has a good relationship with the local government, they may not pay all the taxes and then you could be fined.

 

The key takeaway is to ensure that you have an understanding of the basics before making any purchases in Ghana. Speak with a financial advisor to find out about all of the different taxes that could apply to your situation and make an informed decision about whether or not it is worth it to purchase property there.

 

The penalty for late payment for municipal taxes

For example, in Ghana, the penalty for late payment of municipal taxes is a 10% surcharge. If your landlord fails to pay these taxes on time and you are not able to do so yourself, you will be responsible for paying this fee. It’s no wonder that many landlords who rent properties to foreigners don’t always pay their taxes in full or on time.

You should also consider the exchange rate for these taxes because if it is high, it might be better for you to just have these issues handled by your landlord directly. However, if you plan on renting out the property or even subletting it at some point, then you will need to take care of the taxes and fees. Make sure you know what you’re getting into before signing any contracts with either a landlord or property owner in Ghana.

 

Conclusion

Buying a house in Ghana can be a daunting task, so it’s important to be informed of the tax implications. The following guide will help you understand the tax you will need to pay for your house, and what you can do to avoid penalties for late payment.

Local property taxes:

Local property taxes in Ghana are paid every year on the total market value of the property. You will need to visit the Revenue Authority of Ghana website to find out how much your property is worth.

Municipal taxes:

Municipal taxes are paid every year on the total market value of the property. You will need to visit the Revenue Authority of Ghana website to find out how much your property is worth.

Residence income tax:

Residence income tax is paid every year on the total market value of the property. You will need to visit the Revenue Authority of Ghana website to find out how much your property is worth.