According to the developers, taxes have been identified as a contributing factor to why people hesitate to regularise their landed property.
In an exclusive interview with The PUNCH, the Chief Executive Officer of Riel Homes, Dr Kolade Adepoju, said one of the major problems in every industry in the country is multiple taxation.
He said, “If the multiplicity in taxation can be curtailed, it will reduce the deficit gap in the housing sector. There are multiple taxes paid on the building materials when shipping at the port, and a lot of legal and illegal taxes are levelled.
“However, since the new government has a tax reform committee, I believe those loopholes should be blocked.”
Also, an estate surveyor, Olorunyomi Alatise, said the multiplicity of taxation in the housing sector was one of the reasons people were reluctant about regularising their landed property.
He said, “You just acquired a property and you are trying to process your Certificate of Occupancy, but at the point of doing this, part of the things you need is a tax clearance and tax clearance is evidence that you do not owe the state. Also, you will pay capital gains tax, tenement rate, which has been harmonised into land use charge, and other taxes. By the time they itemise the different taxes you are to pay, you find out that it is a lot for someone that just acquired a property.”
According to Alatise, multiple taxation being levied on the sector is wrong, and a major reason for the lack of transparency in real estate transactions.
“Levying different taxes on the same stream of income is not good for nation’s economy because it can discourage local and foreign investors. It is a big issue here in Lagos particularly because businesses are approached by different tax agencies in the state. In addition, some foreign investors have relocated their businesses because of this,” he argued.
Meanwhile, the Managing Director of Fame Oyster & Co. Nigeria, Femi Oyedele, emphasised that in a country like Nigeria, which faces a significant housing deficit, the government should explore ways to alleviate the burden of multiple taxes in the housing sector.
He said, “Consumers of housing products are made to pay value-added tax, health and safety approval fee, ground rent, tenement rate, and neighbourhood improvement tax.
“In some states, house owners and or occupiers pay land use charge, which is a combination of tenement rate, ground rent, and neighbourhood improvement tax. Developers also pay building plan approval charges and exorbitant prices to procure an all-important Certificate of Occupancy. I think all these are not in tandem with our aim of ensuring affordable housing in Nigeria.”
According to Oyedele, multiple taxes add to the prevailing high cost of housing in Nigeria.
He suggested, “Making houses available, one of the measures the government can take is to reduce taxes on housing and increase inheritance tax and capital gain tax. Taxes are instruments to control consumption, inflation, savings and practices. We need to tax abandoned property more than we tax cement manufacturers. We need to collect mandatory ground rent on property owners then we collect commercial shop owners’ fees, etc.”
According to him, the housing sector does not only provide economic goods and products, it also provides social goods.
