Ghana, a West African nation celebrated for its rich cultural heritage, dizzying markets, dramatic landscapes, and economic promise, is fast turning into a favorite destination for foreign investors and diaspora in their quest to acquire property. With a growing middle class, an appreciable democracy, and a lucrative real estate market, it is little surprise that Ghana finds its name on the lists of property seekers around the world. But to those considering making an investment in the country, a very important question then is: Can foreigners buy property in Ghana?
Well, simply speaking, yes, foreigners can buy property in Ghana. But like most other countries, Ghana has its own set of regulations, laws, and guidelines, which control foreign property ownership. These are in place to ensure that both local citizens and foreign investors are better protected with a consequence of having a balanced and sustainable market in real estate. The important thing for anyone interested in entering the Ghanaian market is to understand such rules, the kind of properties available, and the steps involved in the property-buying process.
In this article, we will show you all you need to know about purchasing property in Ghana as a foreigner. We are going to break down the legal requirements, give some tips on how to navigate the market with success, and attempt to answer a number of frequently asked questions with the intention of putting you in a better position to make your decision. Regardless of whether you are an investor who wants to seize the opportunities availed by Ghana’s growing real estate sector or an expatriate looking for home, this guide will give you all the insights you need.
Can Foreigners Buy Property in Ghana?
Yes, foreigners can buy property in Ghana but with some hindsight into certain restrictions and regulations. While the laws in terms of property ownership for non-Ghanaians are relatively clear-cut, there is enough nuance to warrant a full understanding of the scope of these regulations.
1. Legal Framework Governing Property Ownership
The legal framework for land ownership in Ghana has its basis in both Ghanaian law and land tenure systems, pertaining to both statutory law and customary law. The Constitution of Ghana supports the right of foreigners to purchase property, subject to qualifications.
a. Land Title Registration
The purchase of properties in Ghana is, therefore, governed by the Land Title Registration Act, which provides that properties are to be registered with the appropriate authority to ensure legality of ownership title. It applies both to Ghanaians and foreigners. However, the country operates different types of land titles and systems of registration that are quite significant for foreigners to understand.
– Freehold Title: It is the simplest form of ownership. A freehold title means the owner absolutely owns the land and property. Ownership of land on a freehold basis by foreigners is permitted, but this type of ownership does have certain limitations, particularly with respect to the area of land available to them.
– Leasehold Title: Foreign individuals purchasing property in Ghana mostly do so on a leasehold basis. Leasehold ownership stipulates that a foreigner can only long-term lease land, say for 50 to 99 years, but shall not have outright ownership of the land. Leasehold is more common in commercial property transactions and is generally viewed as a more secure form of ownership for foreigners.
– Customary Land: Customary land is that which, in terms of traditional law, is belonging to indigenous communities. It is possible to lease or sell customary land to foreigners, although the process may be a bit more cumbersome, since negotiations over the same needs to be discussed with local chiefs/landowners. Foreigners who look forward to buying customary land must be very cautious while dealing with this and work with experienced lawyers in order to avoid falling into disputes over the ownership of land.
b. Land Act and Foreign Ownership Limits While a foreigner can own real estate in Ghana, by law, there is a limit to the extent of land a foreigner can hold. By the Ghanaian Constitution and the Land Act, 2020, a foreigner is allowed to hold not more than two acres or 0.8 hectares on freehold. This means that for larger pieces of land, foreigners have to follow a leasehold agreement, whereby the properties can be leased out up to 99 years.
Many foreigners, therefore, prefer to invest in commercial or residential properties, especially in urban centers.
Foreign ownership legislation exists to protect the interests of the local Ghanaians. After all, land is a national asset that the country owns. This can prevent the alienation of land from the local citizens, including any single foreign investor from holding too much land.
2. The Process of Buying Property in Ghana
Buying property in Ghana as a foreigner also includes some similar stages any other country will have but with a few extra things to consider. Here is a short overview of how one can buy property in Ghana:
a. Due Diligence
Due diligence, an essential element before any purchase of property, involves the verification process in which the legality of the property is checked, and also that the seller has perfect ownership over the land or property. Key actions to be performed would include:
– Title Search: A Lands Commission title search is necessary to confirm that the property is properly titled and unencumbered-in other words, it does not have outstanding mortgages or other claims against it. This can also confirm that the property is duly registered in the proper land registration system.
– Land Dispute Check: Some properties, especially those held under customary law, may have existing disputes or claims from local communities. It is important to deal with legal experts who are conversant with the land laws in the locality to avoid potential conflict or complications.
– Surveyor’s Report: A licensed surveyor should conduct a land survey for the verification of boundaries and ensuring that there are no disputes about the property’s location.
b. Engage an Attorney
All foreign buyers are required to seek the services of a qualified Ghanaian attorney who deals in real estate transactions. The attorney can assist in the legal process of purchasing the property, including the title search, preparation of contracts, and ensuring that all documentation is in order.
c. Agreement and Payment
Once due diligence has been carried out, the next thing would be agreeing on the sale by signing an agreement of sale with the seller. The contract agreement should, among other clauses, carry all agreed-to details, including the purchase price, manner, and terms of payment. Normally, in Ghana, properties are paid for in installments, usually with the final payment being done upon transfer.
For foreign buyers, it is usually possible to make payments in either US dollars or Ghanaian cedis. On occasion of making payment to the seller, it is always important to identify and verify with the seller the means for making such payment to ensure that the same does not offend any local law.
d. Land Title Transfer and Registration
The final stage here is the registration of the land title, and it involves a transfer of title at the Lands Commission with the buyer and seller in attendance. Once this occurs, the new owner will be issued a certificate of title and thus be legally recognized as the new owner of the property.
3. Financing Property Purchases in Ghana
It is relatively more complicated for a foreign buyer to finance a property purchase in Ghana. While local banks may offer mortgages for local citizens of Ghana, foreigners may be required to pay full cash for a property as it may be quite difficult to get financing from local financial institutions.
Other financing options that a foreign buyer may look into include:
– International Bank Loans: A few international banks give property loans to foreigners buying real estate in Ghana. Such loans may be more expensive, having higher interest rates and more stringent conditions than those extended to locals.
– Developer Financing: A few of the property developers in Ghana have financing available, mainly when one is buying off-plan properties, meaning new properties that are not yet built. One can negotiate payment plans directly with the developers.
– Private Financing: It also happens, in this case, that the buyers will prefer seeking private financing, which may be through personal savings or private lenders.
4. Essential Things to Note for Foreign Property Buyers
Before buying property in Ghana, the following should be considered by a foreign buyer:
Location: The real estate market is considered one of the fastest-growing sectors in Ghana, with major cities like Accra, Kumasi, and Takoradi offering all sorts of investment opportunities. In this regard, a foreign buyer would need to carefully consider the location to serve the needs and purpose of such a purchase, whether residential, commercial, or for investment.
-Market Growth: The economy of Ghana has grown significantly over the past years, hence real estate will also continue to grow because of increased urbanization, infrastructure development, and a high demand for housing.
– Property Taxes: Property taxes apply in the country and should be settled by the landowners, and foreign investors should understand this implication. Usually, property taxes in Ghana are fairly charged based on the pecuniary value of rent on a specific property, and rates will differ from region to region.
• Cultural Considerations: Land transactions in Ghana are traditionally under the laws of custom and usage, especially when it concerns rural or customary land. It is crucial to learn the local customs and deal with professionals familiar with the specific area where you purchase property.
Frequently Asked Questions
1. Can foreigners buy land in Ghana?
Yes, foreigners have the right to purchase land in Ghana, though they can only hold in freehold up to two acres; larger plots come under leasehold for a period not exceeding 99 years.
2. Should I use a lawyer to purchase property in Ghana?
Yes, we strongly advise that you consult with a local attorney specializing in property law. They can assist you through the process and advise on the legality of the transaction even to the drafting of contracts.
3. As a foreigner, can I get a mortgage in Ghana?
While local banks will consider a mortgage for Ghanaian citizens, there is significant difficulty for foreigners to get a mortgage. Most foreign buyers have to pay the full amount of property, although private lenders or international banks can be found to provide financing.
4. How long does the property buying process take in Ghana?
The procedure for buying a property in Ghana may take months, especially where due diligence and title registration are to be considered. Generally, the time for an entire process may take 1-3 months, depending on the transaction’s complexity.
5. What taxes come with owning a property in Ghana?
In Ghana, land and property-owners pay annual property taxes according to the rental value of the property. The rates range from location to location; therefore, one needs to know all these taxes beforehand before acquiring the property.
Conclusion While foreigners can buy property in Ghana, the legal, financial, and cultural context in which property ownership is exercised must be well understood. Investment in Ghana’s real estate market, when adequately researched with due diligence, advice of attorneys, and cautious passage through the purchase process, can be rewarding. Be it residential, commercial, or agricultural property you are interested in; Ghana has a number of areas where opportunities in one of the fastest-growing economies of the world present themselves.
