Propety Taxes And Our National Development

Ask any Ghanaian who owns a piece of real estate in Ghana today how much property tax he or she pays annually and you will be shocked at the derisive answers you get. However, ask anyone in Los Angeles (my present domicile) the same question and you will be told bluntly that it is in the thousands of dollars EVERY YEAR!

Again, take a one-hour drive through the streets of Accra, Kumasi, Bolgatanga or Keta and if you are not blinded by the dusty roads, it is the potholes that will do their own dirty job on your car. Compare that to the smooth drive you take through the beautiful streets of Beverly Hills, Miami or Washington, DC. Is there a correlation between property taxes and the roads on which you drive in a city? You bet there is! Indeed, it is shocking to note that even 47 years after Independence, most people in Ghana still don't pay property taxes. Is it any surprising that when you drive through the streets of Accra, Kumasi or Bolga you will be fighting with potholes and dusty roads? The idea that you could just refuse to pay your property taxes is almost unheard of in the developed world that most developing nations are aspiring to become.

Before anyone starts throwing darts at me for daring to write on this subject because it might hurt their pocket book, let me give my readers an idea of what property tax revenues have done for the city in which I have lived for the past 18 years or so. Like any other city in the US, property tax revenues have become the mainstay of our local government's budget here in Los Angeles. Year-in-year-out, this source of revenue has helped our city provide the necessary funds for police services, schools, clean water, clean streets, safe neighborhoods, functioning traffic lights, public parks, libraries, good roads and sidewalks, clean beaches and other outstanding public services. Year-in-year-out, public officials in city government ensure that properties are properly assessed for their fair market value, property tax rates are carefully set, notices are sent out on time to property owners and collection is diligently ENFORCED to ensure that the city gets the necessary funds it needs to provide the services mentioned above. Indeed, if you own property in the County of Los Angeles, you have NO CHOICE but pay your property tax. If you don't, that tax becomes a LIEN against your property and, five years after that delinquency, you could forfeit your property to the State. Yes, FORFEIT your property to the State for not paying property taxes! Yes, when you have real estate legislation that truly has teeth, the system really works! It works so perfectly that, year-in-year-out, property owners in Los Angeles religiously pay their taxes and the city collects enough money to pay for the services we so badly need every year. Perhaps it may surprise most people in Ghana to learn that in the US, taxes on real estate account for about 30% to 50% of local tax revenues. Because of the substantial revenues real estate taxes generate for local development, it is not surprising that today there are about 16,000 local jurisdictions all over the US carrying out the assessment and collection of property taxes for their local governments. Indeed, real estate has become the real cash cow that feeds local government for its development projects. Unfortunately, this is not so in our beloved country, Ghana. In Ghana, our governments have always looked up to the Bretton Woods institutions to bail them out with LOANS for our development; loans that will definitely have to be paid back with interest! Obviously, sources of revenue in our own backyard such as property taxes are completely ignored by our own governments in preference for loans from abroad!

Indeed, the County of Los Angeles today collects about THREE BILLION DOLLARS every year in property taxes to keep our streets and neighborhoods safe and clean, our public parks green, our water pure and clean, our beaches beautiful and our children safe and productive in their classrooms.

Fellow Ghanaians, what I have described above is no utopia. It is real and true right here in Los Angeles. The same could happen in Accra, Kumasi, Bolgatanga or Keta. Trust me, the same could happen! Are we willing to pay those property taxes?

Peter Tsikata Real Estate & Mortgage Broker Los Angeles, California.