Capital Gains Tax (CGT) on property sales is one of Ghana's most commonly ignored taxes. Many Ghanaians sell land or property without paying CGT — sometimes out of ignorance, sometimes thinking they can avoid it. GRA is increasingly active in enforcement. Here's what you need to know.
What Is Capital Gains Tax?
Capital Gains Tax is a tax on the profit made from selling a capital asset (like land or property). The "gain" is the difference between what you paid for it and what you sold it for.
CGT Rates for Property in Ghana
- Individuals: 15% of the capital gain
- Companies: 25% of the capital gain (capital gains are taxed as income for companies)
- Non-residents: 25% withholding tax on proceeds (not just the gain)
How the Gain Is Calculated
Capital Gain = Sale Price − (Original Cost + Allowable Expenses)
Allowable expenses you can deduct include:
- Original purchase price
- Stamp duty paid on purchase
- Legal fees on purchase
- Cost of improvements (extensions, renovations — with receipts)
- Selling costs (agent fees, legal fees on sale)
Example: Bought land for GHS 80,000 in 2019. Sold for GHS 280,000 in 2026. Incurred GHS 15,000 in legal and agent fees. Capital gain = GHS 280,000 − GHS 80,000 − GHS 15,000 = GHS 185,000. CGT = GHS 185,000 × 15% = GHS 27,750.
Are There Any Exemptions?
Ghana's tax law provides limited CGT exemptions for individuals:
- Principal private residence exemption: If the property was your main home for the entire period of ownership, CGT may be reduced or exempt. This exemption is available once per lifetime and requires you to have lived in the property as your primary residence.
- Low-income exemption: If your annual total income (including the gain) falls below a certain threshold, reduced rates may apply.
There is no general exemption for long-term ownership (unlike some other countries). Time of ownership does not reduce your CGT liability.
When and How to Pay
- CGT is due within 30 days of completing the sale
- File a CGT return with the GRA Domestic Tax Revenue Division
- Pay the tax at the same time
- GRA will confirm payment and issue a receipt
You need the CGT clearance receipt to complete property registration transfer at the Lands Commission — so there's no avoiding it if you want to do the transaction properly.
What Happens If You Don't Pay
- GRA can assess you at any time within 6 years
- Penalties: 10% of unpaid tax plus interest at Bank of Ghana policy rate + 5%
- Criminal prosecution for tax evasion in serious cases
CGT for Inherited Property
If you inherited property and then sell it:
- Your "base cost" is the market value of the property at the time you inherited it
- CGT is calculated on the gain from that inherited value to the sale price
- If you sell shortly after inheriting at roughly the same value, CGT may be minimal
Planning Ahead
Before selling property, calculate your likely CGT liability and factor it into your asking price. Many sellers are surprised when they calculate how much of their "profit" actually goes to GRA.
Use our free Land Deal Risk Check to ensure your documents are in order before selling. Read about stamp duty requirements and title certificate registration.