Tax on property income in Ghana
Taxation Researcher | November 08, 2021
Effective Tax Rate on Rental Income
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Nonresidents are taxed on all income derived from Ghana.
Nonresident individuals are generally taxed at a flat rate of 20%. However, different tax rates may apply, depending on the income classification.
Rental income earned by residents is subject to a final withholding tax levied on the gross rent. Rental income from leasing residential properties is subject to 8% final withholding tax, and rental income from leasing nonresidential properties is subject to 15% final withholding tax.
CAPITAL GAINS TAX
Capital gains are taxed at 15% of the net gains realized from selling real properties. Acquisition cost, improvement costs, and legal fees and other expenses necessarily incurred in the process of selling the property, are deductible.
Net gains not exceeding GHC50 (US$13) are exempt. Gains are also exempt if the entire amount is reinvested in another property within a year, and if the transfer of ownership was to the taxpayer´s spouse, child, parent, brother, sister, aunt, uncle, nephew or niece.
Property tax is levied annually by local authorities on the estimated value of the property, depending on the classification of the area where it is located. The rates range from 0.5% to 3%.
Income earned by companies is subject to corporate income tax at a flat rate of 25% as of 2012. Income-generating expenses are deductible when calculating taxable income.
CAPITAL GAINS TAX
Capital gains earned by companies are subject to capital gains tax at a flat rate of 15%. Acquisition costs and related expenses are deductible when calculating taxable capital gains.