Government Must Tax Rent Advances as Real Estate Boom Escalates in Ghana - Mantse Ayitey

Mantse Ayitey - Business Executive and Policy Analyst 

Renting accommodation in Ghana is rapidly becoming one of the most lucrative commercial ventures in the country, yet the sector remains largely untaxed, raising concerns about significant revenue losses for the government.

Across many average-income communities, the cost of renting has surged. A single-room self-contained apartment now goes for about GH₵600 per month, with tenants often required to pay one year’s rent in advance. In similar communities, chamber-and-hall and self-contained apartments are renting for as much as GH₵1,000 per month, particularly in major urban centres such as Accra.

Ghana is estimated to have over three million accommodation units nationwide, but despite this vast number, the government continues to struggle with effectively taxing rental properties annually. This challenge persists even as real estate investment continues to boom across the country.

Businesspersons and investors are increasingly channeling funds into apartments and residential properties in high-demand areas such as East Legon, other parts of Accra, Kumasi, Takoradi, and other fast-growing cities. The real estate sector is yielding high returns, making it one of the most attractive investment destinations in Ghana’s economy.

However, while landlords continue to generate substantial income, many have effectively turned accommodation into full-scale businesses without paying corresponding taxes. This situation is contributing to major revenue leakages for the state.

In my view, the Government of Ghana must urgently expand its tax net to include rent advances and rental income. Rent in Ghana has gone beyond being a purely domestic arrangement; it has become a commercial and profit-driven enterprise. As such, it should be treated and taxed like any other business activity.

The government can achieve this by strengthening collaboration between the Rent Control Department and the Ghana Revenue Authority (GRA) to properly structure, support, and fully enforce existing rent tax regulations. Many of these laws already exist but remain weakly implemented.

Additionally, Metropolitan, Municipal, and District Assemblies (MMDAs) can be empowered to directly collect rent-related taxes within their jurisdictions. Revenue generated at the district level could then be channeled into community development projects, including inner roads, drainage systems, sanitation, and other local infrastructure needs.

Such an approach would enable communities to fund development initiatives without resorting to external borrowing, thereby reducing pressure on the national budget while improving living conditions at the grassroots level.

If properly structured and enforced, taxing rent advances and rental income could unlock a significant and sustainable revenue stream for Ghana, ensuring fairness in the tax system while supporting national and community development.

Mantse Ayitey Writes.