Real Estate Market and National Development in Ghana

Real estate plays an important role in national development process but surprisingly, it is one that has received little attention in the literature on development economics, emerging market finance as well as international real estate investment markets. Real estate markets contribute to economic development in a number of ways. A flexible and efficient supply of property assets is needed to support economic growth, and to attract inward investment in productive sectors. The expansion of property stock and rise in its value form a major part of the accumulation of wealth associated with successful economic development in the capital markets. And property values in turn represent a primary source of collateral for commercial banks to lend to individuals and businesses. In addition, property is a major potential source of tax revenue for central and local governments, especially in Sub-Saharan African countries where cash-based informal economies hamper the collection of other forms of taxation. Data on property related taxes from three national and local government sources “the Land Valuation Division of the Lands Commission, Domestic Revenue Division of the Ghana Revenue Authority and Accra Metropolitan Assembly“ have been analysed to show the impact of property market on national development. A time series analysis of revenue from property transactions shows a high performance rate for stamp duty, gift tax and property rate for the six year period ending 2010. The results show total revenue from stamp duty in Ghana increased by 573% from US$1,083,211 in 2000 to US$7,284,679 in 2007, an annualised increase of 31% per year in revenue over the seven year period.