Before buying any type of real estate property in Ghana, one needs to understand the rules governing the class and ownership of land. All real estate properties sprout from land, and only by becoming acquainted with the laws will you be able to purchase your property without any legal complications. 

 

So what are the classifications of land in Ghana and how can I acquire land legally? Well, there are mainly four classes of land recognised under the laws of the country. All residents, both locals and foreigners, can legally acquire and use land for their real estate properties, depending on the availability of the land.

 

 

Types of Land In Ghana

This may come as a surprise, but clans/stools, families, and individuals own the majority of land in Ghana, about 80%, while the government owns only 20%. Government lands are mostly reserved for government projects, industrial, or corporate purposes, and as such, you will barely find the government selling land for residential purposes. Ghana’s land tenure system classifies land as customary/stool/clan lands, family lands, private lands, and government lands.

 

 

Customary/Stool/Clan Lands

Customary land is owned by the traditional leaders or chiefs of an area or town. Its administration is in the hands of the chief of that area or community and their principal elder.  They decide who to sell land to and they can also offer land at will for developmental projects that they may deem beneficial to their communities. Although customary lands are not owned by the government, revenue from such lands is mobilized by the Office of the Administrator of Stool Lands.

 

 

Family Land

Family land refers to land owned by families (extended families). The administration of family land is overseen by a family head with assistance from other family members, usually a principal elder. In Ghana, family lands are usually the class of land that has a lot of litigation issues so it is advisable to ensure that you are dealing with the right head of the family that owns the said land. Performing due diligence and getting older members of the family to confirm if the person selling the land has the right to sell it could save you years of litigation or possible financial losses.

 

 

Private Lands

Private lands are owned by individuals or private entities like estate developers. Usually, it’s an individual who has acquired a piece of stool land or family land and is selling it. Since private lands are owned and managed by individuals without any form of government interference, it’s advisable to be extra careful when buying them. Ensure the lands truly belong to the individual and also check the number of years left on a person’s lease if they don’t hold a freehold title.

 

 

Government Land

Government land is land belonging to the government. It is acquired by the government from traditional leaders or individuals, usually for developmental purposes. The government also sometimes partners with traditional leaders to acquire land. Such land is referred to as vested or state land. Vested lands can be bought directly through the Lands Commission, although it can be quite difficult to get such lands, especially in already-developed areas.

 

 

 

Process Of Buying Property In Ghana: Your Property Buying Checklist

Real estate properties are sometimes considered the pinnacle of investment due to their physical nature and the value they offer. Buying properties in Ghana comes with major advantages, including the high rental yields and capital appreciation but it can be quite stressful to acquire a real estate property. Here are some things you should look out for when buying properties in Ghana.

 

 

Lease on Land

The 1992 constitution of Ghana saw to the fact that all land isn’t outrightly owned by individuals but leased. Ghanaians can hold a leasehold for up to 99 years, whereas foreigners hold no more than 50 years. This means that whichever piece of land you purchase, whether stool land, family land, or government land, there is a number of years that the land belongs to you, after which it reverts to the original owner. To prevent future generations from losing your property, make sure your lease states clearly that it is subject to renewal on expiration. 

 

 

Performing Due Diligence

When buying a piece of land or a property, it is important to perform a search with the Lands Commission. This search will tell you the rightful owner of the land, its actual size, its location, its mode of use, and whether there is a dispute concerning the land or not. Ignoring this search could result in buying land with a dispute or even dealing with a fraudulent person. The search could take weeks to months due to the slow processing and bureaucratic nature of the Lands Commission, but every minute spent on performing due diligence could save you years of litigation issues or money.

 

After performing the search with the Lands Commission, hire a surveyor to verify the size of the land for you. This will help you ensure there is transparency in your dealings with the seller and that there is nothing falsified on the original document.

 

 

Make a Purchase and Transfer Ownership To Your Name

Once every form of due diligence has been taken care of and the land or property has been deemed purchase-worthy and risk-free, it will be time to buy the property and transfer it to your name. Under the guidance of an attorney, this will be accomplished through the signing of a legally binding contract by the involved parties and their witnesses. A property lawyer will be able to help you draft a contract that satisfies all legalities and is also free from loopholes that can lead to litigation in the future.

 

Following the signing of the purchase agreement, the attorney will draft a deed of conveyance that needs to be signed by both parties. This deed signifies that the property has been transferred to the name of the buyer, who is now the new owner.

 

 

Registering Your Property

The last and final step to complete the process of owning a property is to register your land with the Lands Commission and secure your land title certificate. It might take six months to a year to complete the registration process, but you should keep that from deterring you from registering your land. When you leave your land unregistered, you could still face litigation issues and you can lose the land when it’s sold to a different person. Your land title certificate is how you stay immune to litigation issues.

 

 

 

 

Buying Property From Real Estate Developers

The real estate industry in Ghana is quite complex; hence, employing the services of real estate companies will save you a lot of time and possibly money. It is therefore highly recommended, especially for foreigners. Real estate developers purchase large portions of land, complete the complex processes associated with land acquisition and registration, and then resell those lands as serviced plots to individuals. Some also build luxury homes and affordable houses, mostly within gated estates for sale.

 

Some popular companies in Ghana include Buena Vista HomesVAAL Properties, Devtraco Plus, Clifton Homes, and so on. Avenues such as the Ghana Property & Lifestyle Expo are also excellent venues for meeting real estate developers and learning about the market.

 

 

Property Ghana: Estate houses
Estate House by an Estate Developer

 

How Much Do Properties Cost in Ghana?

The price of any real estate property is determined by its location, size, piece of property, and the person selling it. It's no secret that location plays a very crucial role in the price and value of a property and hence, properties located in prime and affluent neighbourhoods will automatically cost more.

 

A plot of land in Ghana that measures 90x90 or 70x80 will typically cost between GHC 30,000 and GHC 12,000,000, depending on the location. For instance, beachfront properties or properties close to international airports usually cost more than other types of properties.

 

Read more on Buying Land in Ghana 

 

 

 

Ghana Property Laws

Property law in Ghana is the area of formal and informal law that governs how citizens can acquire, register, and maintain property. Property can be acquired following statutory or customary laws. The Land Act 2020 (Act 1036) consolidates Ghana’s land law and updates the legal framework for land administration. 

 

Allodial title, customary tenancy, usufructuary interest, common law freehold, and leasehold interest are among the different types of land interests that have been codified by the Land Act.

 

The property laws of Ghana prohibit the creation of a freehold interest in stool, skin, clan, or family land by any person. The Lands Commission does not accept any land instrument for processing and registration that vests a freehold interest in the grantee. 

 

 

Ghana Property Tax

Property tax is a real estate tax that is calculated based on the assessed value of a property. It is known in Ghana as the property rate, and property owners are mandated by law to pay it annually. The Local Governance Act of 2016 (Act 936) governs the property rate in Ghana.

 

Local government authorities (MMDAs) levy property taxes based on the estimated value of immovable property. This usually falls within 0.5% to 3% of the estimated value of the property and the amount to be paid also depends on the property's location.

 

 

Buying Property In Ghana With Mortage

Buying properties and paying the full amount outright in Ghana can be expensive and beyond the reach of the average Ghanaian. For this reason, a lot of people opt for mortgages when venturing into real estate investment. To qualify for a mortgage, you need to be between the ages of 21 and 55 and have a stable source of income.

 

With mortgages, you can take a loan from a mortgage bank and use the loan to acquire your property while paying the bank back in instalments spread over a couple of years, usually from 5-15 years. Interestingly, a lot of real estate developers who sell land and houses have partnered with mortgage banks to make the process of acquiring properties with mortgages even easier.

 

Banks like First National Bank, Stanbic Bank, Absa Bank, Ecobank, and Fidelity Bank are a few of the banks that give mortgages for purchasing land, home improvements, home construction, home equity, or home purchases. These banks use a mortgage calculator to help you choose a suitable mortgage that you will pay back with an interest rate of up to 30%.

 

Depending on the type of mortgage you are opting for and your bank, the requirements and documents needed will vary but here are some of the documents that will be required of you by the bank:

 

  • A complete and signed Bank Mortgage Application
  • Offer Letter from a Real Estate Developer
  • Some form of identification (Passport, National ID, Driver’s licence)
  • Passport photograph of concerted applicant
  • Power of Attorney for non-resident Ghanaians, NRG (Must be witnessed by a Notary Public)
  • Confirmation of income and employment from your employers
  • Pay slips 
  • Qualified audited accounts or copies of individual income tax returns for NRG (for self-employed applicants)
  • Business Profile, Registration, and Certificate to Commence Business (for self-employed applicants)
  • A credit report from an acknowledged credit bureau or credit reporting agency for NRG
  • Bank Statements
  • Base  Deposit or Down Payment to buy a Home  Mortgage Loan
  • Disbursement Conditions 
  • Personal guarantee of the applicant

 

green opal properties
Mortages Houses by Green Opal Properties

 

Property Ghana: Final Thoughts

Buying properties in Ghana can be quite cumbersome, from performing due diligence down to registering your property or land with the Lands Commission. However, following due process and ensuring all documents and legalities are met is how you protect your properties from litigation issues and stop yourself from incurring a financial loss.

 

We hope with this guide you will be able to navigate the intricacies of acquiring landed properties with outright payment or by using a mortgage in Ghana, as well as how you can protect your properties.

 

 


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