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Yes, the analysis of Lagos' property market is included in our pack
Property taxes and fees in Lagos can significantly impact your investment returns and ongoing costs as a property owner.
Understanding these charges is crucial whether you're buying residential property for personal use or commercial investment, as they range from annual Land Use Charges to one-time transfer fees that can total up to 3% of your property's value.
If you want to go deeper, you can check our pack of documents related to the real estate market in Nigeria, based on reliable facts and data, not opinions or rumors.
Lagos property owners pay an annual Land Use Charge ranging from 0.0394% to 0.394% of property value, plus various transaction fees totaling around 3% when buying or selling property.
The main costs include Governor's Consent fees (1.5%), stamp duty (0.5-1.5%), capital gains tax (10% on gains), and withholding tax on rental income (10%).
| Tax/Fee Type | Rate/Amount | When Due |
|---|---|---|
| Land Use Charge (Residential) | 0.0394% of market value | Annually |
| Land Use Charge (Commercial) | 0.394% of market value | Annually |
| Governor's Consent | 1.5% of property value | At transfer/sale |
| Stamp Duty (Sale) | 0.5-1.5% of value | At transfer/sale |
| Capital Gains Tax | 10% of net gain | At sale |
| Registration Fees | 0.2-0.5% of value | At registration |
| Rental Income Tax | 10% withholding | Monthly/as paid |
What is the Land Use Charge in Lagos, and how is it calculated for residential and commercial properties?
The Land Use Charge (LUC) is Lagos State's primary annual property tax that consolidates ground rent, tenement rate, and neighborhood improvement levy into a single payment.
As of September 2025, the LUC rates are 0.0394% of market value for owner-occupied residential properties and 0.394% for commercial properties used for business purposes. Industrial and manufacturing properties pay 0.132% of market value.
The calculation formula is: LUC = Market Value × Relief Rate × Annual Charge Rate. For example, if you own a residential property worth ₦50 million that you live in, your annual LUC would be ₦50,000,000 × 0.0394% = ₦19,700. For a commercial property of the same value, the charge would be ₦197,000.
Lagos State Government assesses the market value based on location, property size, and current market conditions. Property owners can appeal assessments they consider unreasonable through the Lagos State Land Use Charge Tribunal.
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How much is the annual ground rent if the property sits on government-owned land?
Ground rent for properties on Lagos State government land is now consolidated into the Land Use Charge system, so you don't pay separate ground rent for state-owned land.
However, if your property sits on federally-owned land, you still need to pay separate ground rent to federal authorities. The Federal Ministry of Housing and Urban Development coordinates these payments, and rates vary significantly based on location and the terms of your lease agreement.
For properties on federal land in prime Lagos locations like Victoria Island or Ikoyi, ground rent can range from ₦50,000 to ₦500,000 annually, depending on plot size and location. Commercial properties typically pay higher rates than residential ones.
You should check your Certificate of Occupancy or lease documents to determine whether your land is state or federally owned, as this affects which authority you pay and the applicable rates.
What are the Governor's Consent fees when buying or transferring property, and what percentage of the property value do they represent?
Governor's Consent fees are mandatory charges when transferring property ownership in Lagos State, representing 1.5% of the assessed fair market value of the property.
For a property valued at ₦30 million, the Governor's Consent fee would be ₦450,000. This fee is separate from other transfer costs like stamp duty and registration fees.
The total cost of perfecting title (which includes Governor's Consent, stamp duty, registration fees, and capital gains tax) typically amounts to approximately 3% of the property's assessed value. This means for a ₦30 million property, you should budget around ₦900,000 for all transfer-related government fees.
Governor's Consent is required for all property transfers in Lagos State, whether through sale, gift, or inheritance. Without it, the transfer is not legally recognized, and you cannot claim full legal ownership of the property.
How much do you pay for stamp duty on property transactions, and what exact rate applies in Lagos?
Stamp duty rates in Lagos vary depending on whether you're an individual or corporate entity, and the type of transaction involved.
For property sales and transfers, individuals pay 0.5% of the assessed property value while corporate entities pay 1.5%. On a ₦40 million property purchase, an individual would pay ₦200,000 in stamp duty, while a company would pay ₦600,000.
For tenancy and lease agreements, stamp duty rates depend on the lease term: 0.78% of annual rent for leases under 7 years, 3% for leases between 7-21 years, and 6% for leases above 21 years. A 2-year lease with annual rent of ₦2 million would attract stamp duty of ₦15,600.
Stamp duty is payable to either the Lagos Internal Revenue Service (LIRS) or Federal Inland Revenue Service (FIRS) depending on the specific circumstances of your transaction and residency status.
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What is the capital gains tax rate when you sell a property, and how is it calculated in practice?
Capital gains tax in Nigeria is charged at a flat rate of 10% on the net gain from selling property.
The calculation is: Capital Gains Tax = 10% × (Selling Price - Purchase Price - Allowable Expenses). Allowable expenses include legal fees, agent commissions, renovation costs, and other legitimate costs associated with buying, improving, or selling the property.
For example, if you bought a property for ₦30 million, spent ₦2 million on legal fees and improvements, then sold it for ₦50 million, your net gain would be ₦18 million (₦50M - ₦30M - ₦2M). The capital gains tax would be ₦1.8 million.
You must pay capital gains tax within 90 days of completing the property sale to the Federal Inland Revenue Service (FIRS). Failure to pay on time attracts penalties and interest charges of up to 10% per annum.
Keep detailed records of all property-related expenses from purchase through sale, as proper documentation can significantly reduce your taxable capital gain.
Are there registration fees or documentation fees for property titles like Certificate of Occupancy or Deed of Assignment, and how much are they?
Registration and documentation fees for property titles in Lagos typically range from 0.2% to 0.5% of the property value, with minimum amounts often between ₦200,000 and ₦500,000.
The exact fee depends on the property size, location, and type of documentation required. Certificates of Occupancy for larger plots or prime locations generally attract higher fees than smaller residential properties in developing areas.
Additional costs include survey fees (typically ₦150,000 to ₦300,000) and legal fees for document preparation and verification. These are separate from the registration fees and must be budgeted for when acquiring or perfecting property titles.
Processing times vary from 6 months to 2 years depending on the complexity of your case and completeness of documentation. Incomplete applications or disputed boundaries can significantly delay the process and increase costs.
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What are the development levy or neighborhood levies that property owners might need to pay, and how much do they usually cost?
Development and neighborhood levies that were previously charged separately have been consolidated into the Land Use Charge system in Lagos State.
However, if you own property in a private estate or gated community, you may still encounter private development levies charged by estate management or homeowners' associations. These vary widely, sometimes ranging from ₦100,000 to ₦3 million per plot depending on the estate's infrastructure development plans.
High-end estates in areas like Lekki, Victoria Island, or Ikoyi often charge substantial development levies for amenities like roads, security systems, recreational facilities, and utility infrastructure. Middle-income estates typically charge lower amounts for basic infrastructure maintenance.
These private levies are contractual obligations between property owners and estate management, separate from government taxes. Review your property purchase agreement and estate regulations to understand any ongoing levy obligations.
How much are the tenement rates or community rates for tenants, and are they separate from the Land Use Charge?
Tenement rates and community rates no longer exist as separate charges in Lagos State as they have been merged into the Land Use Charge regime.
All previous local taxes including tenement rates are now consolidated into the single Land Use Charge paid annually by property owners. This simplification was implemented to reduce multiple taxation and improve collection efficiency.
As a tenant, you are not directly responsible for paying Land Use Charge or any government property taxes. However, landlords may factor these costs into rental prices, so you indirectly contribute through your rent payments.
If you're renting in a private estate, you may encounter estate-specific charges for services like security, waste management, or facility maintenance, but these are private arrangements between tenants and estate management, not government taxes.
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What are the penalties or late payment fees if you don't pay the Land Use Charge or other property taxes on time?
Lagos State imposes escalating penalty rates for late payment of Land Use Charge based on how long the payment is overdue.
The penalty structure is: 10% penalty if paid 45-75 days after the due date, 20% penalty if 75-105 days late, and 50% penalty if 105-135 days late. After 135 days, the state may initiate enforcement proceedings including property seizure.
For other property taxes like capital gains tax, the Federal Inland Revenue Service charges penalties of up to 10% per annum on unpaid amounts, plus interest at prevailing bank rates.
To avoid penalties, pay your Land Use Charge promptly when due and keep payment receipts as proof. The Lagos State Government offers online payment options through their digital platforms to make timely payments easier for property owners.
Are there exemptions, rebates, or discounts on property taxes in Lagos, for example for owner-occupiers or early payment?
Lagos State offers several exemptions and discounts on property taxes to encourage compliance and support specific groups of property owners.
Pensioners aged 60 and above who are no longer working receive full exemption from Land Use Charge. Religious, charitable, and educational institutions registered with appropriate authorities may also qualify for exemptions.
Early payment discount of 15% applies to the total Land Use Charge if paid before the enforcement or due date. This significant discount can save thousands of naira for property owners who pay promptly.
Special reliefs of 10-20% may apply for vacant land and other specific situations, though these require application and approval from relevant authorities. Property owners should inquire about available reliefs when paying their annual charges.
What fees or taxes apply when renting out property, such as withholding tax on rental income, and at what percentage?
Property owners who rent out their properties in Lagos face withholding tax of 10% on rental income, which tenants or managing agents must deduct and remit to tax authorities.
This 10% withholding tax applies to gross rental income and serves as an advance payment toward the property owner's total income tax liability. Tenants or property management companies are responsible for deducting and remitting this tax monthly or as rent is paid.
Beyond withholding tax, rental income is also subject to regular personal income tax (7-24% for individuals) or corporate income tax (20-30% for companies). The withholding tax paid serves as a credit against this final tax liability.
Property owners must file annual tax returns declaring their rental income, and can claim deductions for legitimate property expenses like repairs, management fees, insurance, and depreciation to reduce their taxable income.
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When exactly are these taxes and fees due during the year, and which authority do you pay them to in Lagos?
Land Use Charge is due annually and payable to Lagos State Government through the Ministry of Finance or Lagos Internal Revenue Service (LIRS) using their online payment platforms or designated banks.
Property transfer fees including Governor's Consent, stamp duty, and registration fees are payable at the time of transaction processing to the Lagos State Land Registry, LIRS, or Federal Inland Revenue Service depending on the specific fee type.
Capital gains tax must be paid within 90 days of completing a property sale to the Federal Inland Revenue Service (FIRS). Rental income withholding tax should be remitted monthly or as rent payments are received to LIRS or FIRS depending on the property owner's residency status.
Most authorities now offer digital payment options including online portals, bank transfers, and mobile payment platforms to make tax payment more convenient for property owners throughout Lagos State.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Understanding Lagos property taxes is essential for successful real estate investment in Nigeria's commercial capital.
These costs can significantly impact your investment returns, but proper planning and early payment discounts can help minimize the financial burden.
Sources
- Lagos State Land Use Charge Portal
- How to Calculate Land Use Charge of Lagos State
- Lagos Nigeria Property Taxes Fees
- Everything About Governor's Consent Land Title Lagos
- Stamp Duty for Tenants is 0.78% Not 6% - FIRS
- Land Title Registration Costs
- Perfection of Title of Land in Lagos Nigeria
- 10 Things to Know About Land Use Charge of Lagos State
- Lagos State Offers 15% Discount for Early Payment
- Real Estate Rental Income Tax for Non-Resident Property Owners