Landlords and property agents in the country are directed to charge six per cent stamp duty on all tenancy and lease agreements.
The Director, Communications and Liaison Department Abdullahi Ahmad of Federal Inland Revenue Service (FIRS) who gave the directive in a statement on Wednesday directed them to remit such collections to FIRS “so that they do not run foul of the Stamp Duty Act.”
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.
“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 the percentage of the total value or sum of the tenancy or lease,” Ahmad said.
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.”
He stated that the responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent. The party making the payment shall have the obligation to account for the applicable stamp duties.
Other stamp duty types and their rates, according to the statement, are Appraisement or Valuation of Property, .5 per cent; Certificate of Occupancy and Partnership, N1,000 flat rate; Gift of Land, 1.5 per cent and Legal Mortgage, 0.375 per cent.
Others are Legal Mortgage (Upstamping), 0.375 per cent; Deed of Conveyance or Transfer on Sale of Property, 1.5 per cent; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 per cent; Power of Attorney (Irrevocable/Land Related), 1.5 per cent and Sales Agreement, 1.5 per cent.
