Navigating the property market in Sierra Leone can be complex, especially for first-time buyers. Whether you’re a Sierra Leonean citizen or an international investor, understanding the legal framework, associated costs, and financing options is crucial to making informed decisions. This guide provides you with essential information to help you confidently purchase property in Sierra Leone. From legal considerations to fees and financing, we’re here to ensure you have all the knowledge you need to successfully invest in real estate.
Legal Framework
For Sierra Leonean Citizens:
All Sierra Leonean citizens have the right to purchase, lease, or receive land as a gift in any part of the country. “Land” typically includes any buildings, trees, or other fixtures attached to the land, as well as any minerals or resources found beneath the surface.
For Non-Citizens:
Non-citizens are permitted to inherit land in the Western Area but cannot purchase or receive land as a gift anywhere within Sierra Leone. However, non-citizens can lease land for up to 21 years in the Western Area and for up to 50 years in the provinces.
For Companies Registered in Sierra Leone:
Companies registered in Sierra Leone may own or lease land in the Western Area if at least 50% of the shareholders are Sierra Leonean citizens. Although companies cannot own land in the provinces, they can lease land for up to 50 years.
Important Considerations:
In Sierra Leone, documents of title are registered, but the title to the land itself is not. This can lead to encroachments, boundary disputes, and ownership challenges. It is highly recommended to seek legal advice and conduct thorough due diligence before proceeding with any land purchase.
Fees
In addition to the property’s purchase price, the following costs should be considered:
- Legal Fees: Estimate paying up to 10% of the purchase price for conveyancing services, which typically include due diligence, drafting a Conveyance, and submitting it for registration.
- Survey Costs: Estimate paying up to Le1,500 per town lot. A surveyor will measure the land and produce a survey plan, which is a crucial part of the Conveyance.
- Real Estate Agent Fees: If you use a real estate agent to market or source the property, expect to pay up to 10% of the purchase price as a fee.
- Capital Gains Tax (CGT): CGT is calculated at 30% of the gain made from the sale minus allowable deductions. In practice, estimate paying up to 10% of the purchase price. Although CGT is the vendor’s responsibility, it is not uncommon for the purchaser to negotiate its payment.
- Stamp Duty: 0.1% of the purchase price.
- Registration of Conveyance: Le250.00
Valuation
It is advisable to obtain a professional valuation before entering negotiations to buy a property. VSL Property offers valuation services, including detailed valuation reports.
Financing
Mortgage plans are available through Commerce and Mortgage Bank (SL) Plc, and property purchases may also be financed through commercial banks or private lending arrangements. However, most property transactions in Sierra Leone are completed with cash payments or short-term installments.
