The Federal Inland Revenue Service (FIRS) has directed that Nigerian landlords and property agents charge six percent stamp duty on all tenancy and lease agreements.
The directive was given by the tax agency’s Director, Communications and Liaison Department, Abdullahi Ahmad on Wednesday, July 22, 2020.
Landlords and property agents are expected to remit the collections to FIRS “so they do not run foul of the Stamp Duty Act.”
Ahmad said:
Property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts six percent duty payable in percentage of the total value or sum of the tenancy or lease.
The burden of payment of the six percent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.
The responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent. The party making the payment shall have the obligation to account for the applicable stamp duties.”
Other Stamp Duty types and their rates include Appraisement or Valuation of Property, 5 percent; Certificate of Occupancy and Partnership, N1,000 flat rate; Gift of Land, 1.5 percent and Legal Mortgage, 0.375 percent, Legal Mortgage (Upstamping), 0.375 percent; Deed of Conveyance or Transfer on Sale of Property, 1.5 percent; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 percent; Power of Attorney (Irrevocable/Land Related), 1.5 percent and Sales Agreement, 1.5 percent.
The Stamp Duties payment is backed by the Stamp Duties Act (SDA) 1939 as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria. The SDA also provides a list of documents in its schedule and the duty payable on each.
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