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Property Tax in Abuja

Residents of Abuja, the Federal Capital Territory, recall with fond memories, the administration of Mallam Nasir el-Rufai as Minister of the Federal Capital Territory (FCT).

El-Rufai, now the Governor of Kaduna State, was credited with the revamping of the transport, roads and education sectors as well as ensuring the sanctity of the Abuja master plan.

Except for his failure to impose a property tax on gigantic, but unoccupied buildings, his predecessors’ achievements, have paled into insignificance in comparison to his developmental initiatives that eventually snowballed into the carving out of several districts, some of which were being developed before he left office in 2007.

Abuja became an administrative capital in 1991, hence the inability to review its 46-year-old master plan, which has been due for review since 1980.

Though Nigeria practiced a military residential system of government from 1985 to 1998, Abuja remained under the grip of a dictatorship, and the National Assembly or the Legislature, the bastion of democracy was not in full operation, and therefore, the idea of the review of the Master Plan was never mooted.

It is therefore surprising that from Ibrahim Bunu to Bala Mohammed, from 1999 to 2015, nobody is yet to present the master plan for amendment and successive ministers have continued to implement the plan in breach.

Property Taxation

Affordable housing remains a huge challenge in the nation’s capital city. Several affording programmes put in place by successive governments have proved ineffective in tackling the challenge.

Ironically, however, while a huge population grapple with the challenge of inadequate housing, thousands or even millions of completed but unoccupied houses dot the landscape but are priced exorbitantly, beyound the reach of a majority of those who are in need of housing.

The Abuja property tax is one avenue government plans to use to compel property owners to give out their houses for rent, as they’ll be paying tax on them, while government in turn will generate money thereof for provision of other critical infrastructure.

The Senate in June 2014, passed the Abuja Property Tax Law which made tax compulsory for property owners in the territory. The Bill was however not assented to by former President Goodluck Jonathan before he left office in May 2015.

According to the law which has been in the Senate since 2011 and which Bill was sponsored by Senator Smart Adeyemi, government as well as property owned by churches and mosques are exempted from taxation.

The Bill basically provided for the establishment of the FCT Internal Revenue Service and other matters connected therewith and also makes provision for assessment, levying and collection of tax on real property within the FCT.

In Section 24, the board is empowered to “cause all taxable, real property in the FCT to be appraised at least once in every five years…” and “all taxable property must be appraised at its market value as of January 1 in the year of appraisal.”

The rate of assessment indicates that taxable real property in the FCT would attract the following rates: (a) Residential-0.1 per cent; (b) Commercial-0.2 per cent; (c) Recreational-0.1 per cent; (d) Government and governmental agencies-0.1 per cent and (e) Others-0.3 per cent.

The tax payable in respect of real property, the bill noted, is from and after January 1 and up to and including December 31 of each calendar year.

LEADERSHIP Sunday learnt that non-commercial areas categorised as residential are expected to pay one per cent of market value of each property as tax depending on location of the buildings. For instance, in Maitama, a 4-bedroom duplex worth N400 million would be taxed N4 million while a 3-bedroom bungalow at Kubwa worth N27 million would also be taxed N270, 000.

Also, the owner of a 4-bedroom bungalow at Lokogoma District valued at N35 million is expected pay a tax of N350, 000 while a 2-bedroom bungalow at Gwagwalada valued for N10 million would also be taxed N100, 000.

A new clause was introduced on imposition and administration of tax on real property. The clause relates to property tax, which is payable on all real property situated in designated areas within the FCT.

On August 21, 2015, some senators emphasised the need for the re-introduction of the Property Tax Bill .

The Senators said it would make economic sense if the Bill was revisited to make it mandatory for payment of tax on properties in the Federal Capital Territory (FCT).

They insisted that property tax would crash the high cost of housing and eliminate the millions of unoccupied buildings and housing estates in Abuja.

The Senators led Sen. Suleiman Nazif, decried that the high cost of housing in Abuja metropolis had forced many to flee to its outskirts and suburbs, while many houses and estates continue to lie unoccupied.

He said that investigations had revealed that most of the empty houses and estates belonged to former ministers of the FCT, their cronies and other persons in government, who insist on collecting high rents.

He said that the owners of the estates, because of the sources of their funds were not bothered whether the houses were occupied or not.

“These properties have been lying fallow for many years, because individuals cannot afford the high rents the owners and their agents are demanding. They have a lot of money in their hands so they are not bothered about how long the properties remain unoccupied,” he said.

Nazif, however, said that something must be done through the law to address the issue.

He said, “by virtue of section 299 of the Constitution of the Federal Republic of Nigeria 1999 as amended, this Senate is charged with the responsibility of making laws for the FCT.

“We believe that if these properties are taxed, these people will be forced to bring down the rent and Nigerians can afford to pay those rents. As long as those properties are not taxed, it means that the owners have been given the opportunity to exploit Nigerians and further depreciate the value of the Naira. This is because these people own billions of Naira lying fallow in properties.”

He alleged that the office of the Minister of the FCT had become a ‘’business centre where the order of the day is the buying and selling of property and land”.

Nazif said that it was only those close to the ministers and ‘’the powerful”, who got land in the FCT while others were forced to go for land at the outskirts of the capital city.

He lamented that Nigerians who ought to live in the metropolis and enjoy available facilities lived in slums in the territory.

“Why shouldn’t there be rent control in the FCT; a rent regulation in the FCT? Why should we just sit down and allow poor Nigerians to suffer when we have a government that has promised change?” he queried.

Supporting Nazif’s view, Sen. Adamu Aliero, a former minister of the FCT, recalled that he had proposed property tax when he was the minister, pointing out that property tax will help to bring down rent in the FCT and generate revenue for effective administration of the territory.

It is therefore imperative that the new Minister of the Federal Capital, Alhaji Muhammed Bello, repackages a property tax bill to the National Assembly as the gains therefrom are enormous.

Building on sewer lines

Several buildings in Abuja are either built on sewage lines or without sanitary lines, locations for high-rising buildings are either littered with makeshift buildings or built squarely on sewage lines or rights of way in breach of the plan.

In the Apo Legislators’ Quarters area for example, the residents have raised objections and written petitions to development control authorities over the approval of buildings on sewage lines and waterways.

The breach of the master plan, without due amendments, has put many buildings and critical infrastructure at risk in Apo and several other areas, including the metropolis.

In Apo for example, both serving and former members of the National Assembly have mounted protests, and even threatened to sue the Federal government because of the blockage of drainage systems by gigantic buildings on green areas and sewage lines.

Former member of the House of Representatives, Hon. Bassey Effiong Etim, has threatened to drag the Federal Government to court over alleged violation of the master plan.

He alleged at a recent press briefing that the Apo residential area where he resides and the entire Abuja metropolis has been heavily-hit by violation of the master plan by the Federal Capital Development Authority (FCDA).

Source: Leadership

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