This post is a follow-up to a first, How Property Rate is Computed in Accra, Ghana, which was written, at the time in the year 2013, to provide some fill-in to an information gap. Judging from the comments received and references to the post in some academic papers, one can say, the post has served the needs of a whole lot of people, including property owners, ratepayers, students and professionals, who needed authoritative information on property rate in the Ghana.
The purpose of the current post is to provide further information on the subject –Property Rate in Ghana– following an amendment of the former law, Act 462, which provided guidelines to property rate administration. Basically, the provisions of the new Local Governance Act, 2016 – Act 936 and the former Act, with regards to property rates, are the same except for the Sections of the Acts where they appear.
Property rate, in Ghana, basically is a kind of property tax that is administered by Local Authorities. A local authority may be a metropolitan, municipal or a district assembly (MMDA) Today, MMDAs derive their mandate to administer property rates from the provision in Article 245(2) of the 1992 Constitution of the Republic of Ghana and subsequently from the Local Governance Act, 2016 – Act 936.
Method of Rating
With reference to Section 146 of Act 936, property rate is defined as a general rate “imposed on immovable property at a specified rate per Ghana Cedi on the rateable value of the property but the amount per Ghana Cedi shall vary as between specified areas of the district, except that within a mixed development area, the amount per Ghana Cedi on rateable value shall vary in respect of property used for different purposes. ”
In defining what constitutes a rateable property, the law state: “subject to the exemptions from and remission of rates, rateable premises shall be premises that comprise buildings, structures or similar development.” In Ghana, certain types of property are exempt from property rates.
A number of terminologies have come up above, which we have to understand now before we proceed any further. That will help us to get a good understanding of the subject matter of this post.
Property: Immovable structure in the form of a building, a set of buildings, a structure or similar development. A property may be a condominium, a bungalow, a farmhouse, a shopping mall, skyscraper, etc.
Rateable Value: “The rateable value of premises shall be the replacement cost of the buildings, structures and other structural development that comprises the premises after the deduction of the amount it would cost at the time of valuation to restore the premises to a condition in which they would be as serviceable as they were when new.”
The rateable value shall not be more than fifty per cent of the replacement cost for the premises that are owner-occupied, and not be less than seventy-five per cent of the replacement cost in any other case. This definition is given by the Section 146(9) of Local Governance Act, 2016 – Act 936. The rateable value of a property is given or must be certified by the Land Valuation Division of the Lands Commission.
Rate Impost: This basically is a tax rate; according to the law it is “a specified rate per Ghana Cedi.” Usually in practice, this is expressed as decimals. For instance, the rate impost for a residential property in Airport Residential Area in Accra for the year 2018 was 0.0018600.
The Rate Impost varies for specified areas of a district based on the level of social and economic status or development of each area as manifested by the level of supply of public services and utilities. Also, the rate impost varies by the use to which the property is put. The rate impost for a residential property differs from that for an industrial property and also from mixed use property.
With these terminologies explained, we can proceed to what to take a look at how a typical property rate bill is computed.
Annual Charge or Current Charge: The property rate charge for a given property for any given year shall be the product of the rateable value and the rate impost. The rateable value is multiplied by rate impost or vice versa to obtain the property rate charged. (Rateable Value x Rate Impost = Property Rate Charged). The amount obtained is the Annual Charge or Current Charge.
Minimum charge: Usually MMDAs set minimum charges for specified areas in their respective jurisdictions. As a result the minimum charge is applied in case the product of the rateable value and the rate impost falls below the minimum.
Now how does a bill for property rate look like? It may come on a printed piece of letter sized or A4 paper or smaller, and would bear the following features:
- The Name and Logo of the Metropolitan, Municipal, or District, Assembly.
- A Date on which the bill is issued.
- A Primary Key or Valuation ID number or Account Number: This is a unique identifier for the a property on a property database. It may be numeric or alpha-numeric. An example is AYE16163008 for a property in Ayawaso East Municipal Assembly in Accra.
- Property Owners Name
- House Number / Physical Address
- Name of Suburb or Community
- Zone Classification (First Class, Second Class, Third Class, etc.)
- Property Use Code (Residential, Mixed Use, Commercial, Industrial, Government Office, etc.)
- Rateable Value
- Rate Impost
- Current Charge
- Arrears: Any unpaid charges from previous year(s)
- Payment: Previous year’s payment
- Amount Due
Other items one may find on the bill are instructions or directions for ratepayers.
Where a ratepayer fails to pay a property rate within a specified time after receipt of a bill, a warning notice shall be posted on the property involved. If the charges are not paid within forty-two days after the notice, the Assembly shall initiate legal steps to recover the amounts involved, and the legal process could lead to an order by the Court for the property to be auctioned to defray the amount of the rate due the Assembly.
30 thoughts on “Understanding Property Rate in Ghana”
The permissions on the payment of property rate
Thank you for this education.
I am unemployed but own and live in a 2BR property in Accra. Out of the blue, I receive a property rate bill of about GHS 440 with a supposed previous balance of another GHS 440 making over Ghs800. I received no bill for the previous year. What can I do? Are some categories of people exempt?
Please you can find the property rate exemptions here: https://laboneexpress.com/2016/03/properties-exempt-from-property-rates/
Assuming I bequeath my properties to my children who are 16, 14 & 12yrs of age. Would they have to pay property rate on their inheritance.
2. Assuming my property escaped assessment for the past 4yrs, and it was later discovered that my property has not been captured unto the assessment roll, how would I calculate taxes due to date.
3. Assuming I have an industrial property and all along half of the building was unoccupied. What steps should I take to convince the authorities that half of my property has been vacant and that they should apply the vacancy to reduce my taxes payable?
1. The current property rate exemptions include persons who are attending an educational institution. So I believe your children may qualify for the exemption provided that they use the property entirely as their residence.
2. A property developer must obtain or must be issued a certificate of habitation on completion. That would make it easier to determine when your property rate assessment should start. In the absence of a certificate your assessment may be based on information you provide and the Assembly’s determination of when the property became occupied. Also, you have to be given a provisional bill only annually until the Assembly obtains a rateable value certified by the Land Valuation Division of the Lands Commission.
3. Normally, you should inform the Assembly when (as soon as) your property becomes vacant, then they can monitor and apply any reduction that you may be entitled to. In the case you state above, you have to provide convincing evidence to the office that it has indeed been vacant.
Thank you for the education. My question for you is, is the Land Valuation Division the only authority that can provide the assembly with rateable values? Or a professional valuation firm/valuer in good standing with the Ghana Institution of Surveyors can also provide it.
Yes, a licensed surveyor can do the valuation with approval from the LVD.
“The Valuer is a reflector of markets and not the maker of market”
Critically discuss the above statement in relation to the act of valuation in Ghana
Please can someone help me out
I am a 15 yo boy and Im educating myself on real estate developing. Thanks a lot for this knowledge.
Pls thanks for the information
I am renting a store for 5 years from a landlord. What is the law on commercial property tax payment. Am I the one to pay the yearly commercial property tax to the government?
With reference to Section 146 of the Local Governance Act, 2016, Act 936, a property rate is payable by the owner of a property.
The same Act envisages instances of landlord-tenant agreement and defines who is ultimately responsible: Section 157, An agreement between a landlord and tenant shall not derogate from any obligation with respect to the enforcement of rate by a District Assembly.
Am I supposed to pay property rate for an uncompleted building?
Pls what benefits becomes community/house owners for paying property rate.
Please is it in the law in ghana to pay prpperty rate and stool lands rate?
Please how is the rate calculated example please. Because some personnel just wrote 100 cedis on the paper without any questions
I am in Nungua and the Rate impost that was given for my property is 0.02. Is dat not too much for a place like Nungua
Maybe your property is rated as mixed if there’s a business/shop on it.
In 2019, the finance minister made a pronouncements on the property rate thereby quashing the outstanding due to the year 2019. I want to know how true is that and how effective is it to the citizenry?
No,not true: nothing was quashed.
At what instance should your property be classified under mixed use or usage?
At what rate impost should I be charged if I occupy an uncomplicated resistance?
Assuming you are wrongly rated, what would the best action’s’ one should take?
In that case one should petition the Rate Assessment Committee of the Assembly. Alternatively, one may petition the MCE or MCD of the Assembly.
Hi, Goerge does the rate differ each year?
The rates may differ from year to year. Assemblies, sometimes decide to maintain same rates for a few years.
Please in simple terms what is a rateable value and how do a surveyor by their figures they quote?
Please how is the rate calculated for a camber and hall at Korle Gonno
Can a property rate collector use force to collect the amount due or threaten to arrest the owner of a property if his bills are overdue?