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  Property owners in Nigeria are required to pay tax to the government for building, renting, and selling real estate assets. They may also be taxed for the sole reason that they contribute to the government’s infrastructure spending. If you are a landlord or aspire to be one, you need to know the various property taxes in Nigeria.
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Some taxes are charged in most parts of the country. Others are state-specific. Regardless of what’s levied, it either becomes a draw on the property owners’ income or a cost that he or she pass down to tenants or buyers. Persons who invest in real estate projects should understand their legal obligations to the government, so they don’t fall afoul of the law. In this article, we’ll talk about a few facts about property taxes in Nigeria.

Fact 1: Nigeria Has a Variety of Taxes on Real Estate

State governments bear the primary responsibility for collecting taxes. However, local government authorities also impose levies on residential and commercial property. Below is a list of property taxes that exist in various parts of the country.
  • Land Use Charge, placed on rental property; in Lagos, it’s a combination of tenement rate, ground rent, and neighbourhood improvement levy.
  • Governor’s Consent Fee, the cost associated with obtaining the governor’s consent to real estate transactions that involve property in the state.
  • Stamp Duty is a tax levied on documents involved in property-related transactions.
  • Capital Gains Tax is charged as a percentage of the profit made from the sale of property.
  • Survey Fee, demanded when registering property, and applied for surveys conducted on a site.
  • Environmental Impact Assessment Fee, a cost incurred for assessing the environmental impact of a real estate project

Fact 2: Property Tax Rates are Determined by a Range of Factors

These are some factors that determine property tax rates in Nigeria:
  • Demand for property and perceived affluence; taxes collected from affluent districts or places with a high demand for property tend to be greater than what’s charged in well-off or lower demand neighbourhoods.
  • Land use: residential, commercial, and agricultural property may attract differing taxes
  • Changes in government policies and regulations can lead to the revision of tax rates.
  • Property size: discounting other factors, larger property sizes tend to draw higher tax payments.
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Fact 3: Commercial Property Taxes Tend to Exceed Residential Property Taxes

In the FCT, taxes payable on residential property currently stand at 0.4% of its value, while it is 0.6% for commercial property. In Lagos, the land use charge for residential, commercial and industrial property is the same: 0.456%. However, while owner-occupied residential property is eligible for a 40% discount on land use charge, neither commercial nor industrial property is offered this relief.

Fact 4: Taxes May be Flat in Absolute Terms or Fixed in Percentage Terms

Some levies are flat in absolute terms. For example, local government authorities may charge each building in their vicinity a flat development levy of ₦500 per square meter for each 12 months. In many parts of Lagos, development levies are pegged at between ₦100,000 and ₦200,000. But property taxes are often calibrated in fixed percentage terms. Examples are capital gains tax (10% of profit from property sale) and stamp duty (1.5% of property value).

Fact 5: There are at Least 3 Ways to Pay Property Taxes in Nigeria

You can pay your property taxes in one of the following ways:
  • Pay into a Designated Bank Account: The Government may designate specific banks to receive property tax payments on its behalf. You can pay your tax into the account that it provided for this purpose.
  • Use an Approved Online Platform: Some states have online portals through which residents can pay their property taxes. In Lagos, you can do this at the Lagos Inland Revenue Service (LIRS) e-tax portal.
  • Work with a Tax Advisor: If you can’t handle the tax payment process yourself for some reason, you may get a tax consultant to help you with it.
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Final Words

Property taxes in Nigeria are occasionally a source of confusion. Each state has its own rules, rates and penalties, so moving between their taxation regimes can be challenging sometimes. Hopefully, this article gives you a preliminary understanding of these government-imposed fees and lets you know how to go about them.
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This article was first published on 4th May 2025
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ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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