Nigeria Loses N36tn Annually to Untitled Land – Operators
Operators in the built environment have estimated that Nigeria loses about N36tn annually due to untitled lands.
The cost of land registration varies depending on the location. However, the average registration fee for a plot of land in Nigeria, depending on the state and Local Government was pegged at N1m by operators, which was used as the basis for this estimation.
In an interview, the Financial Secretary of the Nigerian Institution of Estate Surveyors and Valuers, Ayodele Odeleye, stated that out of the 40 million households nationwide, only about 10 per cent have formal property titles, meaning they are legally recognised by the government and subject to taxes and other regulatory fees.
He said, “The total number of households in Nigeria is about 40 million, according to the Nigerian Bureau of Statistics and Centre for Affordable Housing Finance in Africa.
“In addition, the percentage of households with formal property titles is about 10 per cent as noted by the housing minister. Hence, households without formal property titles (informal housing market) equal 90 per cent of 40 million, which is 36 million households.
“On the revenue lost per household, this depends on what the government would typically earn from a household with a formal property title (e.g., property taxes, registration fees, income tax, building permits, and licences, etc.). Let’s assume the government could collect an average of N1m annually per household with formal property titles.
“The total potential revenue from informal households is estimated by multiplying 36 million households by N1m per household, which amounts to N36tn annually. Thus, the government potentially loses about N36tn annually in revenue due to the informal housing market. This is a rough estimate and the actual figure could vary based on specific taxes, fees, and charges applicable in different regions of the country.”
An official in the Ministry of Land Bureau in Lagos, who spoke due to lack of authorisation to speak on the matter, said the exact amount for land registration differs from one Local Government to another.
He said, “Registration for a plot of land in a place like the Epe area of Lagos would total N4.5m, particularly if such a person is not a civil servant.”
Another land developer, Dr Kolade Adepoju, said he recently completed the documentation of 10 hectares of land at Ibeju Lekki for N600m, of which he estimated at N4-5m per plot.
He said, “So on average, per plot, to get a land title is close to N5m.”
The Chief Executive Officer of Fame Oyster & Co., Olufemi Oyedele, said the amount in Lagos depends on the location of the land.
He added, “In Ikeja, for a plot of land that is 648 square metres, it is about N3.5m. The payment for land registration in 1991, for example, was about N20,000. But things have astronomically gone up. The cost of purchase of land, cost of buildings, and rents being collected have increased. In any case, land registration should not exceed 2.5 per cent of the value of land to conform to global best practices. There are other ways of generating income on land apart from land registration.
“There are ground rents, tenement rates, and neighborhood improvement tax which have been fused in some states as land use charges. There are others like inheritance tax, capital gain tax, withholding tax, building approval fee, etc. The land registration cost in some states is on the high side. If prospective property owners feel the land registration charges are exorbitant, they can make a representation to the governor of the state for review.”
Meanwhile, a legal practitioner in Ota Ogun state, Tejideen Oluwadare, said in transactions like this, the value of the land matters.
He said, “The value of the land matters, and now lands in suburb areas of Ota go as high as N20m and above. For the titling of land till the perfection stage, it is close to N5m, if not more than that.”
Another legal practitioner, Hassan Yakubu, while affirming the N5m estimate in Ogun State said the bottlenecks involved contributed to the high cost of land documentation.
He said, “You will have to take into mind that a Certificate of Occupancy, after conducting surveys and other assessment fees that have been obtained from the Lands Bureau, takes time. So, you will have to set out money for PR for the staff to get things done fast.”
In September, the Ministry of Housing and Urban Development and the World Bank Group pledged to tackle the 90 per cent of unregistered and untitled land in Nigeria.
SOURCE: The PUNCH
