How Much Does It Cost To Buy A House In Ghana

When buying a home in Ghana, it's crucial to know the upfront costs and every other expense involved. Not the sale sum, but the purchase price is the beginning point in every home-buying negotiation.

If you are here, you might be interested in knowing how much it will cost to buy a house in Ghana. There are a number of expenditures to take into account when buying a home in Ghana, such as insurance, mortgage origination fees, and closing costs, 

It is difficult to estimate the actual cost of buying a home in Ghana, as prices vary considerably depending on location and size. However, a basic calculation suggests an average house costs around $100,000 to purchase in Accra, Ghana.

Major costs associated with buying a home in Ghana

Knowing the up-front costs that are likely to accompany the final sale price is the best thing you can do when getting ready to purchase your first home, especially if you plan to apply for a mortgage. Here are some of the costs associated with buying a home in Ghana.

Mortgage down payment 

Your down payment could range from 0% to 20% of the cost of your home, depending on the type of loan you receive. The largest upfront expense when purchasing a home in Ghana is probably a deposit or down payment. 

For you, the buyer, a down payment reduces the amount you will owe, the amount of interest you will pay, and possibly even the length of time you will be making payments. Your down payment can actually be zero, depending on the sort of mortgage you choose.

Major mortgage institutions, like the Ghana Home Loans and banks, offer different types of loan packages. The loan you choose will have a huge impact on the down payment required.

Appraisal fees

Mortgage lenders will want an assessment of the value of the property and these costs add up to the cost of the mortgage being underwritten. An appraisal fee in Ghana is around 1% of the appraised value.

Also, make sure your contract includes a subject for appraisals because lenders occasionally don't notify you of their requirement for an assessment of the property until after the fact is established.

Broker or agency fees 

Another cost you may have to pay is a broker or agency fee. On paper, this agency fee is paid by the seller but in reality, the cost is transferred to the buyer during negotiations of the final purchase price of the home.

An Agency fee is the fee paid to the agent or broker who is helping you buy or sell a home. This fee can range from a few hundred to thousands of dollars. Typically, the agency fee in Ghana is about 5% of the final sale price of the property.

The agency fees can add up, and they're not always clearly spelt out in the listing or contract. In some cases, you, the buyer, may be liable for paying your real estate agent's commissions.

Inspection fees

Home inspectors look over the house and compile a detailed report of any defects or warning signs. Many purchasers believe that receiving an inspection makes them feel safer, and some lenders demand it. In Ghana, this normally costs a few hundred cedis to complete.

Home inspectors occasionally do a title search at the Land Title and Survey Department office. This is to check the registration system to verify if the property is legally owned by anybody other than the seller and to check for any registered easements or restrictive covenants.

Legal fees 

Conveyancing and legal fees are the costs associated with engaging a conveyancer or other professional to do the required legal paperwork when buying a home in Ghana. A legal fee ranges from 3% - 10% of the

Stamp duty

Stamp duty is another cost that home buyers will have to be aware of when deciding how much it cost to buy a home in Ghana. The cost of stamp duty increases with the home price. From 0.25% to 1% of the property's worth is subject to escalating rates of stamp duty.

In general, you must pay stamp duty within 30 days of closing when purchasing a property. Typically, your lawyer or conveyancer will arrange to pay your state revenue office's stamp duty on your behalf.

Property Insurance 

Most lenders in Ghana now require that you keep your property insured against damage. Talk to your lender about what their requirements are. They will provide you with advice on the types and amounts of insurance you must maintain.

Other taxes

When you buy a house, one of the costs you'll incur is taxes.  Taxes can vary depending on the value of the house, but they are usually around 8% of the purchase price. The net gains from the sale of real estate are subject to a 15% capital gains tax. 

Another major tax associated with home ownership in Ghana is property tax. Depending on the area's zoning classification, local governments impose an annual property tax on the estimated value of a property. The rates are in the 0.5% to 3% range.

Deductions are allowed for the expenditures of purchasing the property, making improvements, hiring attorneys, and other necessary charges related to selling the property.

Related: Houses For Sale In Ghana: How Long Does It Really Take To Buy a House

The average cost of buying a home in Ghana

The prices of homes in Ghana fluctuate with the local economy and are thus influenced by location and type-specific factors. The average price of a 2-bedroom house for sale in Accra, Ghana is going for around GH₵520,000. Also, the price of the cheapest 2-bedroom house for sale in Accra, Ghana is around GH₵150,000

It is reported by Numbeo that Accra is 77.91% less expensive than New York. The rent in Ghana, on average, is 88.12% lower than in New York. This means rent is comparatively lower in Ghana than in the U.S.            Source: Numbeo

Cost of buying vs Cost of renting

Both buying a property outright and renting one have additional costs. You might choose to either rent or purchase a house in Ghana depending on which one is appropriate for you.     

Although housing in the city centre is still pricey, it will be more cost-effective to buy a property there rather than rent one, but buying a home outside the city centre will still be more expensive.

When you're thinking about buying a home in Ghana, know that owning a home comes with too many expenses. Especially,  if you plan to live in your home for a short time, owning rather than renting might not be a feasible option.

Renting provides an option to own. The property market reports that the average rent for a two-bedroom in Accra is now around GH₵30,000. That's a considerable cost saving when compared to buying.

However, there are other costs to consider when renting. When you rent, you're responsible for some major maintenance, including repairs and upgrades. If you're planning to stay in your rental for a long time, owning might be the best option.