The Ghana Real Estate Developers Authority (GREDA) has petitioned Finance Minister Dr. Cassiel Ato Forson to reconsider the proposed 5% Value Added Tax (VAT) on immovable properties, calling for more targeted and equitable taxation measures.
The petition comes ahead of the government’s first budget presentation, scheduled for Tuesday, March 11, 2025, following the conclusion of the two-day National Economic Dialogue on March 4, 2025.
In its position paper, signed by the Executive Director of GREDA Samuel Amegayibor urged the government to explore alternative approaches, such as a threshold-based exemption and a graduated taxation scheme based on property value tiers, as a more equitable solution to the proposed VAT.
GREDA’s threshold-based exemption proposal suggests that properties valued up to $100,000 should be exempt from the VAT, with the 5% tax only applicable to properties exceeding this threshold.
The association explained that this strategy would make housing more affordable, especially for lower-income homebuyers, including those dependent on mortgage financing.
“Research indicates that targeted tax exemptions can stimulate housing demand among marginalized populations while ensuring fiscal responsibility,” GREDA added.
Regarding the graduated taxation scheme, GREDA proposed the following VAT tiers:
Properties up to $50,000: 0% VAT
Properties valued between $50,000 and $100,000: 1% VAT
Properties valued between $100,000 and $200,000: 3% VAT
Properties valued between $200,000 and $300,000: 4% VAT
Properties valued above $300,000: 5% VAT
The association emphasized that research from the World Bank shows that graduated taxation schemes promote both equity and efficiency in tax policy, redistributing the tax burden in a way that reflects taxpayers’ ability to pay.
