Property tax is a levy imposed by local assemblies on buildings. These funds are used to carry out developmental projects in the locality. It is important that landowners know and understand Property taxes to prevent legal penalties.
Who Pays Property Tax?
Property tax is paid by persons who own buildings on a piece of land. Such persons include:
• Landlords (both residential or commercial)
• Real estate developers
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• Businesses that own buildings
Therefore, if you own a piece of land without any structure, you don’t pay property tax.
How is Property Tax Calculated?
The Lands Valuation Division of the Lands Commission determines the value of the tax. In assessing the value, factors such as size, condition, age, and location are considered. Property rates may also depend on the use of the building. For instance, the rate payable by the owner of a residential building may be less than the owner of a commercial one.
How to Pay Property Tax in Ghana?
Property taxes are paid annually. Property owners are sent a bill stating the value of tax to be paid, and then they may pay through banks or at the office of the local authority if preferred. Failure to pay property tax may result in interest accruing on the unpaid amount or legal action.
Tax Exemptions
Some properties may be exempted from Property tax. These include:
- Religious buildings (churches, mosques) used solely for worship.
- Charitable organizations providing community services.
- Public or government-owned buildings used for official purposes.
- Educational institutions (schools, universities) that are non-profit.
It is important for all landowners required to pay Property tax to do so. This prevents the penalties that may arise if not adhered to. Also, prospective land owners must consider the effect that property taxes may have on their businesses to better inform their decisions. Therefore, knowledge and understanding of property tax helps businesses make informed decisions and minimize losses for non-compliance.
