Governments at federal and state levels have been urged to review existing taxes in the real estate sector as part of ongoing tax reforms to deepen housing accessibility across the country.Notwithstanding the numerous challenges impeding housing sector growth and access to homes by Nigerians, a major issue is the multiplicity of taxes, which affects developers and building materials producers in end-products delivery. Experts say industry tax reform and interventions will improve homeownership.
The tax policy rates range between 0.14 and three per cent of the property’s assessed value in states, while the local governments also collect tax for public services such as roads, schools, hospitals, and more. Property owners are expected to pay property tax yearly or risk fines and penalties for default.
The Guardian learnt that real estate tax is based on the property’s assessed value, on the chargeable properties, including land, buildings, and improvements on fences or landscaping. To ensure prudent public financial management and optimise value from government assets and natural resources, the committee has suggested the use of technology “Data4Tax” to expand the tax net, increase personal income tax exempt threshold and personal relief allowance, tax break for private sector in respect of wage increases to low-income earners, transport subsidy and net increase in employment and payment of taxes on foreign currency denominated transactions in Naira for Nigerian...
Otegbulu, who doubles as an estate surveyor and valuer, observed that besides the existing multiplicity of taxes in the sector, the rates are high and serve as a burden to players in the industry. “In some states, when you want to buy property you are asked to register it. Government will say the person should pay a special tax. For instance, my father gave me a plot of land somewhere, by the time the land was given to me in 2004; it may be worth N40 million but let’s say now the land is worth N200 million.
“High taxes affect the cost of production, as the manufacturer includes the tax on the cost of selling the product, otherwise he will run at a loss. A lot of businesses have closed down due to multiple taxes. He expressed worries over some states that use the housing sector to collect taxes, describing it as unacceptable. He said: “Government cannot be billing people’s houses because they want to collect personal income tax. If l wants to develop a house, it can take 20 years to complete it, it is the obligation of the owner to pay tax and not for the government to impose tax on the building.
Source: News Formal (newsformal.com)
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