An Overview Of Property Tax Administration Across The Three Tiers Of Government In Nigeria

By Zhihwi Dauda Esq And Abodunrin Ibukunoluwa Hannah Esq

1.0 ABSTRACT

This article examines the legal and institutional framework for the administration of property taxation across Nigeria’s three tiers of government. It traces the historical evolution of property taxation from its origins in medieval England to its adaptation within Nigeria’s colonial and postindependence legal order, and considers the constitutional distribution of taxing powers among the Federal, State and Local Governments. The article analyses property-related taxation at the Federal level (Stamp Duties and Capital Gains Tax), the State level (Ground Rent, Land Use Charge, Governor’s Consent Fee, Stamp Duties and Land Registration Fee), and the Local Government level (Tenement Rate). It then undertakes a comparative analysis of the three tiers, identifies recurring administrative challenges including overlapping taxing powers, poor property enumeration, low voluntary compliance, political interference, and outdated valuation methods and proposes recommendations for reform. The article argues that, while each tier occupies a distinct constitutional space, closer harmonization and modernization of administration are needed to realize property taxation’s full revenue potential in Nigeria.

2.0INTRODUCTION AND EVOLUTION OF PROPERTY TAXATION

Taxation is a fundamental source of government revenue and an essential tool for economic development. Black’s Law Dictionary¹ defines taxation as the imposition or assessment of a tax, and the means through which government obtains the revenue required for the performance of its functions. It is a compulsory financial charge imposed by government on individuals, businesses and properties within its jurisdiction.

Property taxation is a specific form of taxation imposed on immovable property such as land and buildings. The Food and Agriculture Organization² defines property tax as an annual tax levied on real property, usually based on the market value of the property, whether imposed on land alone, buildings alone, or both together. Property taxation is widely recognized as one of the most reliable sources of internally generated revenue, particularly for sub-national governments.

The origin of property taxation can be traced to medieval England, where obligations to the king or local lords were initially based on social status and land ownership, and were often discharged in agricultural produce, livestock or military service. As society evolved, these obligations became fixed monetary payments, and in urban community taxes were assessed according to an individual’s ability to pay. Early examples include the Danegeld³, a tax imposed on landholdings, and the Church tithe, which required individuals to contribute a portion of their produce. By 1194, England had introduced the ‘Aid on Moveables’⁴, a tax assessed on the value of personal property and goods a development that laid the foundation for modern systems of direct taxation.

In Nigeria, property taxation has its roots in the colonial era. The country inherited the British system of property rating at independence in 1960, but the system was largely outdated and failed to reflect Nigeria’s changing economic and social realities, so its administration became increasingly ineffective. To address this, the Federal Government introduced reforms in the 1970s, the most significant being the Land Use Act 1978⁵, which vested land ownership in State Governors to hold in trust for the people and established a new framework for land administration. The Act has since shaped the development of property-related taxes such as tenement rates, land use charges, capital gains tax on property transactions, and stamp duties.

3.0 THE         ROLE             OF       PROPERTY TAX    REVENUE    IN        NIGERIA’S    ECONOMIC DEVELOPMENT

Property tax revenue plays a significant role in Nigeria’s economic development. It is an important source of internally generated revenue for the Federal, State and Local Governments, reducing dependence on oil revenue and federal allocations. Revenue from property taxes finances public infrastructure such as roads, schools, hospitals and drainage systems, while at the State and Local Government levels it supports urban development, environmental sanitation, waste management and community development. Property taxation also promotes fiscal autonomy and, through proper assessment and collection, encourages the productive use of land and property, thereby enhancing government revenue and the delivery of public services. The Federal Government of Nigeria recorded property tax (Capital gain tax) revenue generated in the sum of 522 Billion for 2025 only⁶

3. THE CONSTITUTIONAL FRAMEWORK FOR TAXING POWERS IN NIGERIA

Nigeria operates a three-tiered Federal system in which the power to tax is distributed among the Federal, State and Local Governments under the 1999 Constitution of the Federal Republic of

Nigeria (as amended)⁷, which delineates the legislative and consequently the fiscal responsibilities

of each tier. The Federal Government, acting through the National Assembly, holds the most extensive taxing powers, derived principally from the Exclusive Legislative List however some of the property tax impose by Federal Government has by same legislation vested in state government the power to only collect same as regard to individual. State Governments exercise taxing powers under the Concurrent Legislative List and their residual powers, while Local Governments derive their taxing powers mainly through delegation from State laws.

Property taxation at the Federal level is, however, largely indirect and transaction-based. Rather than taxing the mere ownership or occupation of land and buildings which falls chiefly within the province of the States, the Federal Government captures value from property through taxes such as Capital Gains Tax, Stamp Duties and Education Tax. Paragraph  4 to 6 below examine, how each tier of government administers property taxation within this constitutional design.

4.0 ADMINISTRATION OF PROPERTY TAX AT THE FEDERAL LEVEL The Federal

Government administers three principal instruments through which it derives revenue connected to property: ax, Stamp Duties, and Capital Gains Tax. Each is examined below.

4.1  Stamp Duties: Stamp duties are taxes imposed on certain legal and financial instruments agreements, contracts, receipts, conveyances, leases and mortgages and play a significant role in validating documents relating to property transactions. Where a transaction is between a company and an individual, the duty is administered by the NRS on behalf of the Federal Government.

The governing framework is found in Chapter Five of the Nigeria Tax Act 2025⁸. Section 125 NTA Act⁹ requires every chargeable instrument executed in Nigeria to be stamped within thirty days of execution, failing which it cannot be relied upon as evidence in court. Section 127 NTA Act ¹⁰ defines chargeable instruments to include bills of exchange, drafts, cheques and letters of credit, while sections 128, 129, 130, 131 and 134 of the NTA Act¹¹ extend the scope to sale or purchase options, conveyances on sale, conveyances made in consideration of a debt, and leases many of which arise in property transactions.

Stamp duties are assessed either as fixed duties (a prescribed amount irrespective of transaction value, e.g. receipts, guarantor forms and proxy forms) or as ad valorem duties, calculated as a percentage of the value stated in the instrument. Most property transactions fall into the latter category.

Duty on a Deed of Assignment or Deed of Conveyance is assessed on an ad valorem basis, 1.5%¹² of the property’s purchase price or market value. The Liability ordinarily falls on the purchaser, or transferee to pay for the stamp duty fees. Another property tax that follows is the payment of fees which is a prerequisite for registration at the Land Registry and for obtaining the Governor’s Consent; but in FCT consent of the Minister of the FCT. It worthy to note that under Section 126(1) of NTA 2025¹³ Any unstamped dutiable instrument is not be admissible in evidence in any court, judicial or arbitration proceedings, and in satisfying any evidentiary requirements unless otherwise stated by the same Act. Though it has an exception under sub paragraph (2) of same section which provides: “Notwithstanding the provisions of subsection (1) of this section, an unstamped instrument may be given in evidence in a criminal proceeding”¹⁴

4.2CAPITAL GAINS TAX

Capital Gains Tax (CGT) on disposal of assert by company is administered by the NRS. It is levied on the profit or gain realized from the disposal of chargeable assets. The governing framework is contained in Part VIII (sections 33 to 55) of the Nigeria Tax Act 2025¹⁵. Section 33 NTA¹⁶ provide to the extent that gains accruing to any person from the disposal of chargeable assets in a year of assessment are chargeable to tax¹⁷. Section 34 NTA ¹⁸ provides that, subject to statutory exemptions, all forms of property including land, buildings, shares, securities, debts, digital or virtual assets, foreign currencies and intellectual property rights constitute chargeable assets, reflecting the legislature’s intent to modernize the regime for emerging commercial realities.

The law is clear as when a disposal is said to have occurred. Section 35 NTA ¹⁹ provides that a disposal occurs whenever a capital sum is derived from the sale, transfer, assignment, lease, compulsory acquisition or other disposition of an asset, and extends to compensation, insurance proceeds, consideration for the surrender of rights, and sums received for the use or exploitation of an asset. CGT therefore reaches a wide range of transactions beyond outright sales.

As to how Capital tax is computed, Section 39 NTA²⁰ provides that the chargeable gain is computed by deducting the acquisition cost and other allowable expenses wholly, exclusively and necessarily incurred in acquiring and disposing of the asset from the consideration received, ensuring that only the actual economic gain is taxed.

Worthy of noting is that the constitutional competence for capital gain tax lies in item 59, Part I of the Second Schedule to the 1999 Constitution²¹, which vests the National Assembly with legislative competence over the taxation of incomes, profits and capital gains. The Nigeria Tax Act exempts certain bodies public charitable, educational and ecclesiastical institutions, registered cooperative societies and trade unions, local government councils, and bodies established for economic development provided the gains are not derived from any trade or business they carry on. Although CGT is not a tax on the ownership of property, it is a tax on the gain realized from its disposal, and it reinforces the Federal Government’s constitutional responsibility for the taxation of capital gains arising from property transactions.

As the saying goes: there is no general rules without and exception so also is in the application of capital gain tax Under the Nigeria Tax Act 2025, certain exemption is provided as follows: Chargeable assets subject to exemptions²² Principal private residence is exempted once in life time²³, Personal chattels exempted with a threshold²⁴. Motor vehicles for private use are exempted however only maximum of  2 per year²⁵, Gifts of property are exempted²⁶, Assets held in trust for charities, religious, co-ops, trade unions are exempted²⁷. Etc note also that there is General exemption for government/statutory bodies under Chapter Eight of the NTA 2025.

5.0ADMINISTRATION OF PROPERTY TAX AT THE STATE LEVEL

State Governments play a significant role in the administration of property-related taxes and charges within their constitutional and statutory powers. These taxes constitute an important source of internally generated revenue (IGR) and enable State Governments to finance infrastructure, public services and other developmental projects. Through state laws and applicable federal legislation, States are empowered to administer property taxes and charges relating to land ownership, occupation and property transactions. The major property-related taxes and charges administered at the state level include the Land Use Charge (in states where it has been enacted), Ground Rent, Governor’s Consent Fee, Stamp Duties, Land Registration Fee, and, in respect of individuals, Capital Gains Tax and Withholding Tax.

5.1Ground Rent

Ground rent constitutes one of the principal property-related fiscal obligations administered by State Governments. It is an annual charge payable by the holder of a statutory right of occupancy over land granted by the Governor pursuant to the Land Use Act 1978²⁸. Although ground rent is technically a statutory rent rather than a tax in the strict legal sense, it performs an important revenue-generating function and forms part of the broader framework of property taxation at the state level. Worth of mention is also that land use Act 1978 is in the constitution itself.

The legal foundation for ground rent is found in section 1 of the Land Use Act²⁹, which vests all land within each state (except land vested in the Federal Government or its agencies) in the Governor, to be held in trust and administered for the use and common benefit of all Nigerians. In exercising this authority, the Governor may grant statutory rights of occupancy subject to the payment of annual ground rent as prescribed, and every holder of such a right whether evidenced by a Certificate of Occupancy or other valid grant is under a legal obligation to pay it.

Liability for ground rent does not depend on whether the land has been developed or improved.³⁰ Unlike tenement rates, which are assessed with reference to buildings or improvements, ground rent is imposed by virtue of the holder’s right of occupancy over the land itself; the existence or absence of structures on the land does not affect the obligation to pay, or the amount payable, except where otherwise determined by the relevant state authority.

The amount of ground rent payable is fixed by the Governor or appropriate state authority, in the Federal Capital Territory, by the President through the Minister of the FCT. Failure to pay ground rent may constitute a breach of the conditions attached to the right of occupancy and may result in revocation under section 28 of the Land Use Act³¹. Nevertheless, the exercise of the Governor’s power of revocation must comply with due process, and any revocation carried out in violation of the Act is liable to be declared unlawful; where revocation is based on failure to pay ground rent, compensation is generally not payable.³²

Although the legal obligation to pay ground rent rests on the holder of the statutory right of occupancy, parties to a property transaction may, by contractual agreement, allocate responsibility for payment between themselves. Such private arrangements do not, however, affect the statutory power of the state government to demand and recover ground rent from the person recognized by law as the holder of the right of occupancy.

5.2Land Use Charge

Land Use Charge is one of the principal property taxes administered by certain State Governments. It is a unified property tax introduced by state legislation to simplify the assessment and collection of property-related levies by consolidating various charges into a single annual payment. Although the regime is not applicable in every state, those that have enacted Land Use Charge laws rely on it as an important source of internally generated revenue for financing public infrastructure, urban development and essential public services.

The Land Use Charge was first introduced in Lagos State through the Land Use Charge Law³³, promulgated on 22 June 2001 and made applicable throughout the state as the sole legislation for the collection of land-based rates and charges, consolidating all property and land-based rates into a single new charge.

The charge is statutorily imposed on the owner of a property, but where the owner is not in occupation, the collecting authority may appoint the occupier usually the tenant to be assessed and to pay the charge, which the tenant may then deduct from monies otherwise due to the owner. There is accordingly an indemnity in favor of the tenant or occupier against the owner, where the owner did not receive the initial demand notice. Where a property owner is confirmed to have received a Land Use Charge demand notice for the first time and is nonetheless asked to pay arrears, such demand notices are reviewed against proof of delivery of demand notices for the relevant preceding year(s).

5.3Governor’s Consent Fee

A Governor’s Consent Fee is a mandatory state-level charge required to complete the legal transfer of land ownership in Nigeria; without it, a sale remains incomplete in the eyes of the law, and the requirement also ensures that government has an accurate record of who owns a given property.

Section 1 of the Land Use Act³⁴ vests all land within each state in the Governor, to be held in trust and administered for the use and common benefit of all Nigerians, and entrusts control and management of that land to the Governor; the Governor’s consent is accordingly a mandatory requirement for the valid alienation of a statutory right of occupancy and of certain customary rights of occupancy. Section 26 of the Act³⁵ renders any purported alienation of an interest in land null and void where the Governor’s consent has not first been sought and obtained.

The Governor’s Consent Fee is not calculated on the price actually paid to the seller; instead, the state values the property and sets a ‘Fair Market Value’ (often published in a government valuation booklet), and the fee is charged as a percentage of that assessed value³⁶. Payment of the fee is important evidence that the purchaser is the recognized legal owner of the property, and it is typically required by banks before a title can be accepted as collateral for a loan.

5.4Stamp Duties at the State Level

At the state level, stamp duties are taxes applied to written or electronic documents and are collected by the respective State Internal Revenue Service (SIRS). They apply specifically to instruments executed entirely between individuals including tenancy and lease agreements, deeds of assignment, powers of attorney, and individual receipts a jurisdictional line that state governments retain exclusively. The practice is that the party paying the consideration for the property bears the duty and, where that party fails to do so, liability falls on whoever seeks to rely on the instrument in judicial proceedings.³⁷ Stamp duty is administered either as a flat fixed fee or as an ad valorem rate calculated as a percentage of the transaction’s monetary value; documents must be stamped within thirty days of execution, and failure to do so attracts financial penalties and renders the document inadmissible as evidence in court.

5.5Land Registration Fee

Land registration fee is a statutory charge imposed by State Governments for the registration of instruments affecting interests in land at the State Land Registry. It is an important component of property taxation and land administration because it ensures that ownership and other proprietary interests are officially recorded, providing legal certainty, security of title and transparency in land transactions. Unlike recurrent property taxes such as the Land Use Charge, land registration fee is a transaction-based charge, payable when an instrument transferring or creating an interest in land is presented for registration.

The constitutional and statutory basis for land registration at the state level is rooted in the Land Use Act³⁸, which vests all land within each state in the Governor to hold in trust for the use and common benefit of Nigerians. Each state accordingly establishes its own Land Registry and enacts laws regulating the registration of land instruments and the fees payable³⁹; because land administration falls within the legislative competence of the states, registration fees differ from one state to another.

The primary purpose of land registration fee is not merely to generate revenue but also to facilitate efficient land administration. Registration creates an official public record of ownership, protects purchasers against competing claims, reduces fraudulent land transactions, and promotes confidence in the real estate market. It also enables State Governments to maintain accurate land records, which serve as an essential database for assessing and administering other property-related taxes and charges, including the Land Use Charge, Ground Rent and Governor’s Consent Fee; without proper registration, the administration of these taxes becomes significantly more difficult.

6.0ADMINISTRATION OF PROPERTY TAXATION AT THE LOCAL GOVERNMENT LEVEL

Local Governments constitute the third tier of government in Nigeria and play a significant role in the administration of property taxation at the grassroots level. Their authority to administer certain taxes and levies derives from the 1999 Constitution⁴⁰, particularly the Fourth Schedule, as well as the Taxes and Levies (Approved List for Collection) Act⁴¹. The rationale for vesting these powers in Local Governments is to enable them to generate revenue for the provision of essential public services and the promotion of local development.

Property taxation at the local government level is centered primarily on the administration and collection of Tenement Rates, imposed on rate able buildings and properties within the jurisdiction of a Local Government Area. Through this system, Local Governments identify assessable properties, determine applicable rates, issue demand notices to owners or occupiers, collect the prescribed charges, and enforce compliance where necessary. Revenue generated contributes to the financing of community infrastructure and services such as road maintenance, waste management, markets and primary healthcare.

Although Local Governments are constitutionally empowered to administer tenement rates, the scope of this power has, in some states, been affected by reforms such as the introduction of Land Use Charge laws, which consolidate certain property-related levies under State Governments. Nevertheless, Local Governments continue to occupy an important position in Nigeria’s property tax system by facilitating property identification, valuation and revenue generation at the local level.

6.1Tenement Rate

Tenement rate is potentially a large source of local authority revenue, and positive steps are generally taken to ensure a prompt and effective system of collection. It is an annual tax imposed on owners or occupiers of rate-able buildings and landed properties within the jurisdiction of a Local Government Area, and is one of the major sources of internally generated revenue available to Local Governments.

The legal basis for tenement rates is found in the 1999 Constitution⁴²and the Taxes and Levies (Approved List for Collection) Act, which recognize the authority of Local Governments to assess and collect tenement rates within their respective jurisdictions.

Administration begins with the identification and enumeration of rate-able properties within a Local Government Area. The Local Government then assesses the value of each property in accordance with the applicable rating law and determines the amount payable by the owner or occupier. On completion of assessment, a demand notice is issued specifying the amount due and the period for payment; payments are made through designated revenue collection channels, and official receipts are issued to taxpayers. Where a taxpayer defaults, the Local Government may invoke the enforcement procedures provided under the relevant legislation to recover the outstanding rate.

Revenue generated from tenement rates finances grassroots development projects and essential public services, including the construction and maintenance of local roads, markets, drainage systems, waste management, street lighting and primary healthcare facilities. The tenement rate accordingly remains the primary property tax administered at the local government level and an important source of revenue for the effective discharge of local government functions.

7.0COMPARATIVE ANALYSIS OF THE ADMINISTRATION OF PROPERTY TAXATION BY THE THREE TIERS OF GOVERNMENT

The administration of property taxation in Nigeria reflects the country’s federal structure, under which taxing powers are distributed among the Federal, State and Local Governments. Although each tier performs distinct functions based on constitutional and statutory provisions, there are areas where their responsibilities intersect, giving rise to administrative and constitutional challenges. A comparative analysis of the three tiers highlights both the similarities and differences in their roles, as well as the controversies surrounding the exercise of taxing powers.

7.1 Similarities

Despite their different constitutional mandates, the three tiers of government share a common objective of generating revenue to finance public expenditure and promote economic development. Each tier administers taxes or levies established by law and is responsible for assessing taxpayers, collecting the relevant taxes, enforcing compliance, and accounting for revenue generated. Furthermore, all three tiers operate through designated tax or revenue authorities: at the federal level, property-related taxes are administered by the Nigeria Revenue Service (NRS); at the state level, by the respective State Internal Revenue Services; and at the local government level, by revenue departments or authorized officials responsible for tenement rates and other approved local levies. All three levels rely on statutory provisions and administrative procedures to ensure effective tax administration and enforcement.

7.2Differences

The principal distinction between the three tiers lies in the scope of their taxing powers and the nature of the property-related taxes they administer.

The Federal Government primarily administers taxes arising from property transactions and income derived from property, including Companies Income Tax on incorporated real estate companies, Capital Gains Tax on gains from the disposal of chargeable assets, Stamp Duties on instruments relating to property transactions, and other federally administered taxes connected with property. It does not impose taxes on the ownership or occupation of land and buildings as such.

State Governments exercise the widest powers over property taxation. They administer taxes imposed directly on land and buildings, particularly through Land Use Charge laws and other state property tax legislation, and are also responsible for land administration under the Land Use Act, maintaining property valuation systems, assessment records and enforcement mechanisms within their respective states.

Local Governments have more limited taxing powers, their principal property-related tax being the Tenement Rate, imposed on rate able properties within their jurisdictions to support grassroots development and local services. In several states, however, the traditional tenement rate has been absorbed into the Land Use Charge system administered by State Governments.

8.0 CHALLENGES OF PROPERTY TAX ADMINISTRATION AT THE THREE LEVELS OF GOVERNMENT

1. Multiple Taxation and Overlapping Taxing Powers :The Constitution draws lines between the tiers on paper; those lines blur considerably once actual transactions are involved. ⁴³A single property transaction may attract federal Stamp Duty, a state Land Use Charge and, in some cases, a separate tenement rate imposed by the local government. Consequently, taxpayers may be required to deal with different tax authorities, comply with multiple assessment procedures and make several payments in respect of the same property. This overlap creates uncertainty, increases compliance costs and undermines the efficient administration of property taxation. A major source of this problem is the constitutional controversy surrounding the administration of tenement rates. While many states have enacted Land Use Charge laws that consolidate property-based taxes into a single assessment administered by state agencies, the Constitution assigns the assessment of privately owned houses and tenements to local government councils. The constitutional position was authoritatively settled by the Supreme Court in Knight Frank & Rutley (Nigeria) Ltd v Attorney-General of Kano State⁴⁴, where the Court held that, by virtue of section 7(5) of the

Constitution and paragraphs 1(b) and 1(j) of the Fourth Schedule, the power to assess and

impose rates on privately owned houses and tenements belongs exclusively to local government councils. The Court made it clear that a state government cannot assume or transfer that constitutional function to another authority. The practical implications of this principle were demonstrated in Chief Ferdinand O. Orbih v Edo State Geographic Information Service & Ors,⁴⁵ where the Edo State High Court declared unconstitutional the provisions of the Edo State Land Use Charge Law that empowered a state agency to assess and collect tenement rates. The Court held that, in the absence of a valid constitutional basis for the arrangement, the relevant provisions were invalid and restrained the state agency from continuing their enforcement. These decisions demonstrate that uncertainty over the constitutional authority to administer tenement rates has become a significant challenge in property tax administration. Where states incorporate tenement rates into Land Use Charge regimes despite constitutional objections, taxpayers are often left uncertain as to the lawful authority entitled to assess and collect the tax. Such uncertainty encourages disputes, increases administrative costs, weakens voluntary compliance and contributes to the broader problem of overlapping taxation in Nigeria.

2. Poor Property Enumeration and Inadequate national or state Property registration Database: An effective property tax system depends on accurate and up-to-date records of taxable properties. One of the major challenges confronting property tax administration in Nigeria is the absence of a comprehensive property database: across many states and local government areas, numerous properties remain unidentified, unregistered or improperly documented, making it difficult for tax authorities to accurately assess and collect propertyrelated taxes. Many newly developed residential and commercial buildings are not captured in official property registers, so that while some owners consistently pay taxes, others escape taxation entirely. This creates inequality within the tax system, reduces government revenue, and undermines administrative efficiency a challenge particularly pronounced at the local government level, where manual record-keeping and inadequate technological infrastructure often impede effective enumeration and assessment.
3. Taxpayer Resistance and Low Voluntary Compliance: A further significant challenge is the low level of voluntary compliance among property owners. Many taxpayers either refuse to pay property taxes or deliberately understate the value of their properties to reduce liability, an attitude often influenced by the perception that tax revenues are not transparently managed or utilized for public development. In many communities, owners challenge tax assessments or ignore demand notices because they believe government has failed to provide adequate infrastructure and services in return. The resulting non-compliance places additional pressure on tax authorities, who must expend considerable time and resources on enforcement, while revenue that could have funded public development is lost through evasion and avoidance.
4. Political Interference in Property Tax Administration: Political interference remains a significant impediment to effective property tax administration. In some instances, political office holders influence tax administration by granting unofficial exemptions, suspending enforcement activities, or directing tax authorities to refrain from collecting taxes from certain individuals or communities for political reasons. Such interference undermines the independence of tax authorities, weakens enforcement, creates unequal treatment among taxpayers, erodes public confidence in the tax system, and contributes to reduced revenue generation, particularly at the state and local government levels.
5. Outdated Property Valuation Methods: Accurate property valuation is fundamental to a fair and efficient property tax system, yet many tax authorities in Nigeria continue to rely on outdated valuation records that do not reflect current market values. As property values appreciate over time, failure to conduct regular reassessments results in inaccurate assessments and significant revenue losses. Properties in rapidly developing urban centers, for example, may continue to be assessed using obsolete valuation data despite substantial increases in market value, creating inequities whereby similar properties attract different tax liabilities depending on when they were last assessed. Regular property revaluation is therefore essential to fairness, transparency and efficiency in property tax administration.

9.0 RECOMMENDATIONS

To enhance the administration of property taxation in Nigeria and address the challenges identified above, the following recommendations are proposed.

1. Strengthening Digital Property Tax Administration the Federal, State and Local Governments should invest in modern digital tax administration systems, adopting integrated electronic platforms for taxpayer registration, assessment, payment and compliance monitoring to reduce administrative bottlenecks, minimize revenue leakages, and enhance transparency, with existing digital initiatives expanded and harmonized across all tiers.
2. Establishment of a Comprehensive Property Database government should develop and maintain a comprehensive, regularly updated national property database through interagency collaboration; the use of Geographic Information Systems (GIS), satellite mapping and digital land registries will facilitate the identification, valuation and monitoring of taxable properties, broadening the tax base and reducing evasion.
3. Harmonization of Property Tax Laws and Administrative Responsibilities greater coordination is needed among the three tiers to eliminate overlapping tax demands and multiple taxation, with existing laws harmonized to clearly define the taxing powers and administrative responsibilities of each tier, reducing disputes and improving taxpayer confidence.
4. Strengthening Tax Enforcement Mechanisms tax authorities should be given adequate legal, institutional and financial support to improve enforcement, with revenue officials trained on modern administration practices and sanctions consistently applied against deliberate evasion or avoidance.
5. Regular Property Valuation and Reassessment properties should be subjected to periodic valuation and reassessment so that tax liabilities accurately reflect prevailing market values, promoting fairness and preventing revenue losses arising from outdated assessments.
6. Public Awareness and Taxpayer Education government should intensify public enlightenment campaigns on the importance of property taxation, educating owners on their obligations, the legal basis for property taxes, and the benefits derived from tax revenue, in order to improve voluntary compliance.
7. Promoting Transparency and Accountability in the Utilization of Tax Revenue governments at all levels should ensure that revenue from property taxation is utilized transparently and for visible public infrastructure and services, strengthening public confidence and encouraging voluntary compliance.
8. Strengthening Intergovernmental Collaboration effective administration requires close cooperation among the three tiers, with regular information sharing, joint enforcement initiatives, and collaboration between tax authorities and land administration agencies to improve the identification of taxable properties and reduce administrative duplication.

10.1  CONCLUSION : Property taxation in Nigeria operates within a constitutionally structured, threetiered fiscal architecture in which each tier occupies a distinct but interlocking role. The Federal Government’s contribution is indirect rather than direct: it does not tax land or buildings as such, but captures the economic value flowing from property through Companies Income Tax, Stamp Duties and Capital Gains Tax. State Governments exercise the widest and most direct powers, administering Ground Rent, the Land Use Charge, Governor’s Consent Fees, Stamp Duties between individuals, and Land Registration Fees, underpinned by their custodianship of land under the Land Use Act. Local Governments, though more constrained, retain an important grassroots role through the Tenement Rate. Together these instruments form a coherent, if imperfectly coordinated, national system of property tax administration. Realizing its full potential, however, requires addressing the recurring challenges of overlapping taxing powers, poor property enumeration, weak voluntary compliance, political interference and outdated valuation through the digitalization, harmonization, and intergovernmental collaboration set out in the recommendations above.

¹ Bryan A Garner (ed), Black’s Law Dictionary (11th edn, Thomson Reuters 2019).

²Food and Agriculture Organization of the United Nations, ‘Land and Water Development Division: Taxation of Land and Property’ (FAO, 2002).

³WJ Corbett, ‘The Anglo-Saxon Danegeld’ (1900) 14 English Historical Review 27.

⁴Sidney Webb and Beatrice Webb, English Local Government: The Manor and the Borough (Longmans, Green & Co 1908) 34.

⁵Land Use Act 1978, Cap L5, Laws of the Federation of Nigeria 2004, s 1.

⁶ Sami T. “Capital gains tax hits record N522bn in 2025” Punch newspaper online February 15, 2026. Available at <https://punchng.com/capital–gains–tax–hits–record–n522bn–in–2025/ >Accessed on 7th July, 2026 ⁷Constitution of the Federal Republic of Nigeria 1999 (as amended).

⁹Nigeria Tax Act 2025, s 125.

¹⁰Nigeria Tax Act 2025, s 127.

¹¹Nigeria Tax Act 2025, ss 128, 129, 130, 131 and 134.

• Nigeria Tax Act 2025, 5^th Schedule item 5
• Nigeria Tax Act 2025, s 126(1)
• Nigeria Tax Act 2025, s 126(2)

¹⁵Nigeria Tax Act 2025, Part VIII, ss 33-55.

¹⁶Nigeria Tax Act 2025, s 33.

¹⁸Nigeria Tax Act 2025, s 34.

¹⁹Nigeria Tax Act 2025, s 35. ²⁰Nigeria Tax Act 2025, s 39.

²¹Constitution of the Federal Republic of Nigeria 1999 (as amended), Second Schedule, Part I, item 59.

• Nigeria Tax Act 2025, s 34(2)
• Nigeria Tax Act 2025, s 51
• Nigeria Tax Act 2025, s 52(1)
• Nigeria Tax Act 2025, s 53
• Nigeria Tax Act 2025, s 54
• Nigeria Tax Act 2025, s 55 ²⁸Land Use Act 1978 (n 5).

²⁹Land Use Act 1978 (n 5), s 1.

³⁰ Onuoha Iheanyichukwu Joachim, Norhaya Kamarudin and Godwin Uche Aliagha, ‘Application of the Powers of Governors’ to Charge Ground Rent Under Nigeria Land Use Act of 1978’ (2015) 5(3) International Journal of Real Estate Studies 1.

³¹Land Use Act 1978 (n 5), s 28.

³²IO Smith, Practical Approach to Law of Real Property in Nigeria (3rd edn, Ecowatch Publications 2007) ch 9, discussing the requirement of due process and the general rule that no compensation is payable where a right of occupancy is revoked for breach of a condition such as non-payment of rent.

³³Land Use Charge Law of Lagos State 2001 (Lagos State of Nigeria Gazette No 29, Vol 34, 2001), since repealed and re-enacted by the Land Use Charge Law 2018, Laws of Lagos State.

³⁵Land Use Act 1978 (n 5), s 26.

³⁶ Jude O Ezeanokwasa and Anthony Ifeanyichukwu Eze, ‘The Requirement of Governor’s Consent in the Alienation of Interest in Land under the Land Use Act: A Critical Review’ (2021) 2(1) Awka Capital Bar Journal 23.

³⁷Stamp Duties Act, Cap S8, Laws of the Federation of Nigeria 2004; the administration of stamp duties on instruments between individuals has since been consolidated under the Nigeria Tax Act 2025 (n 8), Chapter Five, discussed above at section 4.2.

³⁹See, eg, Registration of Titles Law of Lagos State, Cap R2, Laws of Lagos State 2015; Land Instruments Registration Law, Cap 58, Laws of Ogun State 2006.

⁴⁰Constitution of the Federal Republic of Nigeria 1999 (as amended), Fourth Schedule, para 1(j).

⁴¹Taxes and Levies (Approved List for Collection) Act 1998 (as amended), Cap T2, Laws of the Federation of Nigeria 2004, Schedule, Part III.

• Constitution of the Federal Republic of Nigeria 1999 (as amended), Fourth Schedule, para. 1(j).
• Ololade Tope Olawuyi, Bamisile Aderonke Oluwabukola and Umejuru Ozioma Rachael, ‘An Overviewof the Imperatives and Challenges of the Nigerian Tax System’ Nnamdi Azikiwe University, Awka Journal of Commercial and Property Law [2025] (12)(1).
• Knight Frank & Rutley (Nigeria) and Another v Attorney-General of Kano State (1998) 7 NWLR (Pt 556) 1 (SC), per Uwais CJN.
• Chief Ferdinard O Orbih (SAN) v Edo State Geographic Information Service & Ors (Suit No B/99OS/2021, High Court of Edo State, Benin Judicial Division, 25 April 2022).

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