Legal considerations for buying luxury apartments in Ghana

Purchasing a luxury apartment in Ghana can be an exciting prospect, offering comfortable living in a vibrant city. However, as with buying property anywhere, there are important legal considerations to keep in mind.

Careful research and understanding of your rights and responsibilities will help ensure your real estate investment runs smoothly. In this comprehensive guide, we explore the key legal aspects of buying a luxury apartment in Ghana.

Selecting the Right Location

One of the first steps is choosing where you would like to live. Popular neighbourhoods for luxury apartments in Ghana include:

1. Airport Residential Area - Close to Kotoka International Airport, with conveniences and a vibrant expat community.

2. East Legon - An established neighbourhood near the financial hub, with amenities and restaurants.

3. Cantonments - Near central Accra, embassies, and government offices. Upscale area.

4. Labone - Trendy neighbourhood with top schools and family-friendly amenities.

Consider traffic in the area, proximity to your work, leisure activities, and amenities that matter most to you. Visiting the neighbourhoods at different times of day and week will give you a feel for the vibe.

Real Estate Agents and Developers

Highly reputable real estate agents and developers are key for buying luxury apartments smoothly in Ghana. Look for companies that:

1. Have many years of experience with proven success selling luxury properties.

2. Are registered legally with all proper licenses.

3. Have a portfolio showing top properties sold.

4. Can connect you directly with developers for off-plan sales.

5. Provide assistance with legal documentation and negotiations.

Check reviews and talk to past clients to verify agents have strong track records. Top developers like VAAL Ghana focus on luxury apartments and have strong reputations for high-quality buildings with exceptional amenities.

Buying Options: Off-Plan Versus Completed Units.

When looking to purchase an apartment, you typically have two options:

Off-Plan - Buying a unit pre-construction, allowing customizations but higher risks.

Completed Unit - Move in faster but with less flexibility on layouts.

Off-Plan Sales

Purchasing off-plan involves reserving an apartment early while the building is under development. Benefits include:

1. Lower pricing before demand rises.

2. Customize unit layouts and select options like finishes.

3. Secure parking, and storage, and select the ideal unit location.

However, off-plan sales also come with risks, like projects stalling or finishing behind schedule. Do thorough due diligence on developers like VAAL Ghana to ensure they can deliver as promised.

Completed Units

Buying after construction allows you to move in faster without off-plan risks. However, choices will be more limited for unit locations and options. Completed units often sell at a premium price point as well.

Hiring a Real Estate Attorney

Engaging an experienced real estate attorney is strongly advised when purchasing property in Ghana. They can help you:

1. Review all contracts, mortgage terms, and disclosures to protect your legal rights.

2. Verify proper documentation, title, surveys, and registrations.

3. Handle negotiations and closing procedures.

4. Ensure all requirements related to foreign buyers are met.

A few thousand dollars in legal fees upfront can save you significant headaches down the road. Look for attorneys knowledgeable on luxury apartment purchases specifically.

Paying Foreign Currency or Ghana Cedis

As a foreign buyer, you can pay for an apartment in Ghana in foreign currency or local cedis. Each option has pros and cons.

Foreign Currency - Protects against currency fluctuations but may limit mortgage options. Common currencies include USD, Euros, and British Pounds.

Ghana Cedis - More mortgage choices from local banks but exposes you to currency risk if the Cedi declines versus your home currency.

Discuss the best payment approach with your real estate attorney based on your circumstances. Clarify currency expectations upfront in your purchase agreement.

Structuring Ownership as a Foreigner

Ghanaians living abroad and foreign nationals have two main options for owning property:

1. Purchase as a Foreigner - You can directly buy and be the legal owner as a foreign individual. However, this typically limits mortgage financing options.

2. Establish Local Company - Set up a local company or subsidiary and purchase the property under its name. This widens financing choices but comes with compliance requirements.

Your attorney and real estate agent can advise on the best ownership structure aligned with your objectives and situation.

Understanding Ghana Mortgages

Getting a mortgage financing option as a foreign buyer in Ghana is possible, but comes with limitations. Things to know:

1. Down payments - Expect to provide 40-50% as a downpayment for a mortgage in Ghana as a foreigner.

2. Interest rates - Mortgage rates tend to be 15% or higher, making significant down payments all the more important for affordability.

3. Approval - Seek pre-approval before house hunting so you know your budget. Requirements are stringent for foreign buyers.

4.Currency - Mortgages from local banks are commonly in Ghana Cedis, exposing you to currency risk.

Discuss options like offshore mortgages from international institutions if you need financing.

Navigating Taxes

Taxes are assessed differently for Ghanaians living abroad versus foreign nationals purchasing real estate in Ghana:

Ghanaians Abroad

1. Exempt from capital gains tax when selling.

2. 5% withholding tax deducted from rental income.

3. 8% VAT is charged on the supply of completed buildings.

Foreigners

4. Pay a capital gains tax of around 15% when selling.

5. 8% withholding tax on rental income.

6. No VAT exemption on completed properties.

Consult with accounting and legal professionals to ensure you comply with all tax regulations

.

Handling Home Insurance

It's essential to secure robust home insurance when purchasing an apartment in Ghana. For luxury units, expect to pay around 1 - 2% of property value annually. Be sure your policy includes:

1. All risk coverage - Fire, floods, theft, property damage, and liability claims.

2. Adequate sum insured - Full replacement value for the apartment, fixtures, and contents.

3. Earthquake protection - Ghana is prone, so this is a key add-on.

Review policy limits and exclusions thoroughly with an experienced insurance broker.

Understanding Maintenance Fees

In addition to taxes and insurance, luxury apartments come with monthly maintenance fees. This covers:

1. Security

2. Common area cleaning and maintenance (elevator, lobby, gardens etc.)

3. Swimming pool maintenance

4. Generator and fuel

5. General repairs and upkeep

Maintenance fees often range from 1-2% of apartment value annually. Make sure they are clearly spelt out in purchase contracts. Non-payment can result in penalties.

Securing Proper Documentation

Purchasing an apartment in Ghana requires documentary proof at every step:

1. Sales contract - Have an attorney review it in detail. Outlines terms, prices, timelines, etc.

2. Title documentation - Proves ownership and transfers title from seller to you.

3. Tax clearance certificate - Shows seller has paid all outstanding taxes.

4. Receipts - For any payments made during the process for record keeping.

5. Identification - Passport, residency ID, and birth certificate.

6. Record plans - Survey and site plans approved by authorities.

7. Completion certificate - For off-plan purchases, certifies building was constructed as specified.

Do not complete any transaction without proper documentation in place.

Following All Procedures for Foreigners

As a foreign buyer, you must follow all government protocols and disclosures:

1. Register - Foreigners must register completed purchases within 60 days.

2. Reporting - File form A to Bank of Ghana showing foreign exchange inflows used.

3. Disclosures - Declare all overseas assets and income per local regulations.

4. Permits - Obtain any required permits related to home renovations, maintenance, and construction.

Strictly adhering to procedures protects your investment and avoids troubles down the road.

Choosing the Right Luxury Development

With many options on the Accra market, it's critical to select the right luxury apartment development that aligns with your needs and expectations.

VAAL Ghana's Harmonia Residence stands out as a premier luxury choice located in the Airport Residential Area. Benefits include:

1. Stunning high-rise tower designed by renowned architects.

2. Crystal-clear swimming pool, gardens, and world-class amenities.

3. Intelligent home automation systems and features.

4. Range of spacious 1, 2, 3 & 5 bedroom units from 300 - 4,700 sq ft.

5. Developer VAAL is known for delivering exceptional quality luxury properties on time.

With an unbeatable location and amenities, Harmonia Residence is the right choice for an owner occupier or investor seeking a luxury apartment paired with an elite lifestyle.

Conclusion

Purchasing a luxury apartment in Ghana offers an opportunity to secure a comfortable lifestyle in an up-and-coming market. Yet as a major investment, buyers should closely evaluate all legal considerations before proceeding.

Seek guidance from trusted real estate attorneys and agents to ensure your rights are protected. Allow sufficient time for due diligence like location scouting, document review, and inspections before transacting.

Adhering to all procedures and financial requirements for foreigners avoids major headaches down the road. With the right research and preparation, purchasing an apartment like VAAL Ghana's Harmonia Residence can prove an astute investment in living your best life in Ghana.

FAQs:

1. What are the most popular luxury apartment neighbourhoods in Ghana?

Some top luxury apartment neighbourhoods in Ghana include Airport Residential Area, East Legon, Cantonments, and Labone. These offer great amenities, restaurants, and proximity to major business hubs.

2. How can foreign buyers finance a luxury apartment purchase in Ghana?

Foreign buyers often need a 40-50% down payment and may have limited mortgage options from local banks. Seeking offshore financing from international lenders is common. Understanding financing is key before purchasing.

3. Do foreigners pay taxes differently than Ghanaians on apartment purchases?

Yes, Ghanaians living abroad enjoy some capital gains and VAT exemptions that foreign nationals do not. Foreigners pay a capital gains tax of around 15% when selling. Consulting tax experts is crucial.

4. Why choose VAAL Ghana's Harmonia Residence for a luxury purchase?

With its prime location, stunning architecture, elite amenities like a refreshing pool, intelligent home systems, and a range of spacious units, Harmonia Residence stands out as a top luxury development in Accra.

5. How can foreigners ensure legal rights when buying apartments in Ghana?

Hiring an experienced real estate attorney to review all documents, contracts, and procedures is highly recommended. Following all regulations for foreign buyers avoids major problems.

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