Abolish 5% VAT on Estate Development and Taxes on Building Materials – GREDA to Government

The real estate sector in Ghana has faced rising costs due to high taxes and expensive building materials. GREDA argues that the 5% VAT on estate development has worsened the situation, discouraging investments and pushing property prices beyond the reach of average-income earners. The association highlights the following concerns:

• Increased Construction Costs: Taxes on essential building materials such as cement, iron rods, and tiles contribute to the rising cost of houses.

• Housing Deficit: Ghana is currently facing a significant housing shortfall, and the imposition of VAT further restricts efforts to bridge the gap.

• Reduced Investment in Real Estate: High operational costs deter both local and foreign investors from investing in housing projects.

• Limited Access to Affordable Housing: Middle- and low-income families struggle to afford homes due to increased selling prices.

GREDA’s Recommendations

To address these challenges, GREDA is urging the government to:

• Abolish the 5% VAT on real estate development to ease the financial burden on developers and potential homeowners.

• Reduce or remove import duties on key building materials to lower construction costs.

• Implement policies that support affordable housing through tax incentives and financial support for developers.

• Encourage local production of building materials to reduce reliance on expensive imports.

Government’s Response and Stakeholder Expectations

The call for tax reduction comes ahead of the government’s upcoming budget presentation, where fiscal policies affecting multiple sectors, including real estate, will be addressed. Industry stakeholders, including construction firms and financial institutions, are keenly watching to see whether the government will consider these demands.

Affordable housing remains a pressing issue in Ghana, and GREDA believes that policy changes are essential to making homeownership accessible to a larger population. The real estate industry awaits a government response, hoping for reforms that will boost investment and make housing more affordable for Ghanaians.