Real Estate in Ghana just got a whole lot more expensive this year, with the implementation of the new VAT Act (Act 1151) from January 1, 2026. This replaces the previous 5% flat rate for estate developers or sellers with a unified system that carries an effective tax rate of 20%.
With most people already priced out of home ownership by virtue of low incomes, late employment, among other reasons, this 20% hike just made Ghana's Housing Crisis a lot more worse !!
The good news is all properties built-for-sale by any of the DCANS Developers with Built-in Direct Mortgages or sourced by us, come with the applicable vat absorbed by the group.
As of early 2026, Ghana has implemented a new VAT regime (Act 1151) for real estate, effective from January 1, 2026, which replaces the former 5% flat rate with a unified system involving a 15% VAT rate, plus a 2.5% NHIL and 2.5% GETFund levy, creating an effective tax rate of 20% on taxable real estate supplies, including residential developments by registered estate developers.
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 (Note: It shouldn't appear to you that some developers are exempt from registering to charge vat as any business with annual turnover above GHs750,000 is now required to register to charge vat - previous threshold was just GHs200,000).
Residential sales by private individuals (non-developers) are generally exempt - not a blanket exemption !!
Whilst it's the developer or seller who is the collecting agent for Ghana Revenue Authority (GRA), it's the buyer who pays this tax. If any developer chooses to absorb this vat on your behalf, that should be a big favour done you, and not a right you're entitled to !!
There are ongoing discussions within the government to review the 20% VAT rate due to concerns over rising housing costs.
THIS TAX EFFECTS
This tax policy is contributing to rising homeownership costs, increasing property prices, and higher rental charges.
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.
TAX COMPLIANCE
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.
The DCANS Advantage
While the 20% rate applies across the industry, The DCANS Group Limited (corporate parent) absorbs all VAT on behalf of all buyers in the following category:
- Buying from any DCANS developers
- Buying from any of the externally-sourced properties in our inventory,
- Buying a property we have sourced for you
- Prospective Buyers that have committed some form of closing costs
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