By Kofi Ahovi
The five years exemption period granted to companies engaged in the construction for letting or sale of residential premises to Ghanaians has been scraped off. This would take effect from next year.
The tax holiday would however still apply to estate developers who wish to partner with the Ministry of Water Resources, Works and Housing to provide affordable housing to lower income Ghanaians.
The tax incentive was provided to the estate developers mainly to create affordable accommodation for the middle to low income earners. This according to the government is being abused by the developers.
The real estate developers who benefited from this incentive unfortunately focused on building residential accommodations for the high and upper class of the society while abandoning the original purpose.
The Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, explained in the 2011 budget statement that “given government’s heavy involvement with the provision of affordable housing, real estate developers who partner the Ministry of Water Resources, Works and Housing to provide affordable houses will continue to benefit from the five year exemption”.
Ghana has an accumulated residential housing backlog of about 700,000 units. The current annual demand of about 140,000 housing units and the accumulated backlog of 700,000 indicate that over 60% of national housing requirements are unmet.
Demand for decent housing remains vibrant and provides significant impetus for investors in the housing industry.
The five years exemption period granted to companies engaged in the construction for letting or sale of residential premises to Ghanaians has been scraped off. This would take effect from next year.
The tax holiday would however still apply to estate developers who wish to partner with the Ministry of Water Resources, Works and Housing to provide affordable housing to lower income Ghanaians.
The tax incentive was provided to the estate developers mainly to create affordable accommodation for the middle to low income earners. This according to the government is being abused by the developers.
The real estate developers who benefited from this incentive unfortunately focused on building residential accommodations for the high and upper class of the society while abandoning the original purpose.
The Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, explained in the 2011 budget statement that “given government’s heavy involvement with the provision of affordable housing, real estate developers who partner the Ministry of Water Resources, Works and Housing to provide affordable houses will continue to benefit from the five year exemption”.
Ghana has an accumulated residential housing backlog of about 700,000 units. The current annual demand of about 140,000 housing units and the accumulated backlog of 700,000 indicate that over 60% of national housing requirements are unmet.
Demand for decent housing remains vibrant and provides significant impetus for investors in the housing industry.
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