Ghana has immense opportunity in property development and construction. The potential investor interested in the Real Estate sub-sector may be looking at the construction of residential houses, Industrial and commercial houses as well as shopping centers. Residential accommodation, particularly hotels and hostels for tertiary institutions.
Land acquisition in Ghana
The Ghana Investment Promotion Centre Act, 1994 (Act 478) guarantees the foreign investor within the real estate sub-sector a lease-hold interest of up to 50 years, subject to renewal. The Lands Commission in Ghana has been charged with the responsibility to facilitate the acquisition of land by the investor.
Potential within the sub-sector in Ghana
Experts in the construction sector recognize huge potential within the real estate sub-sector in Ghana, particularly among the ever-increasing middle- income earners who are eager to own houses as well as among the large number of Ghanaians living abroad. Opportunities also abound for investors interested in Export Processing Enclave real estate development, which has been fashioned to provide factory shells, office space and serviced plots to potential investors. Hostel needs for the teaming tertiary students in and around the country’s Public and Private Universities/Polytechnics offer excellent opportunity to the foreign investor within the real estate sub-sector.
Investment Incentive within the Sector
- I. Income Tax Incentives
- Corporate Tax Rate of 25% for Hotels
Income Tax Rate applicable to a company listed on the Ghana stock exchange is 30%
II. Tax Exemptions
- Five (5) year tax holiday for rental income from residential and commercial premises.
- If located within a free-zone enclose, a real estate developer enjoys:
- ten (10) years exemption and 8% corporate tax thereafter
- 100% exemption from payment of direct and indirect duties on all imports for construction.
Investment Guarantees
- The constitution of Ghana provides absolute guarantee to all investments in the country, The country is also politically stable.
- Ghana is signatory to the Multilateral Investment Guarantee Agency [MIGA] Convention of the World Bank, which provides coverage [insurance] against non-commercial risk
Recommendation
With plans far advanced towards the establishment of a land bank to assist investors with land acquisition, coupled with the local availability of cheaper but quality construction materials, the foreign investor within the real estate sub-sector has virtually no difficulty establishing in Ghana. Again, if current economic strides being chalked by the country is anything to go by, then opportunities in the sub-sector are endless for the prospective foreign investor.