The Federal Inland Revenue Service (FIRS) has issued a directive to landlords and property agents across the country to charge 6% stamp duty on all tenancy and lease agreements.
The directive was contained in a statement FIRS issued on Wednesday by the agency’s Director, Communications and Liaison Department, Abdullahi Ahmad.
Mr Ahmad said the burden of payment of the six per cent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter while the responsibility of collection and remittance falls on the landlord or agent in charge of the property for lease or rent.
“Property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts six per cent duty payable in percentage of the total value or sum of the tenancy or lease,” Ahmad said.
“In any case, the party making the payment shall have the obligation to account for the applicable stamp duties.
“Some other Stamp Duty types and their rates are Appraisement or Valuation of Property, 1.5 per cent; Certificate of Occupancy, Partnership N1,000 flat rate; Gift of Land, 1.5 per cent Legal Mortgage, 0.375 per cent, Legal Mortgage (Upstamping) and 0.375 per cent.
“Others are deed of Conveyance or Transfer on Sale of Property, 1.5 percent: Gift of Land, 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.” He added
Stamp Duties payment is enabled 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.
The Finance Act 2019 states that: “the Federal Inland Revenue Service shall be the only competent authority to impose, charge and collect duties upon instruments specified in the Schedule to this Act if such instrument relates to matters executed between a company and an individual, group or body of individuals.”
The total Stamp Duty collection for 2019 was N18 billion.
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