How foreigners can own property in Nigeria

How foreigners can own property in Nigeria


How foreigners can own property in Nigeria

A peculiarity about purchase of property in Nigeria, particularly in Lagos, is the Consent Fee. The Land Use Act of 1978 converted all land to state land. Therefore, land cannot be owned privately. Formally, the state government is the owner of the land and, therefore, any change in ownership or assignment, in case of a lease, should have the consent of the governor.

The consent of the governor of the state is needed for the assignment of title to use, occupy, and improve property with a statutory certificate. This certificate does not include rights to sell, give, or sub-let, which requires further consent from the State Governor.

Sale of real estate does not involve actual selling and purchasing. There is only the transfer of rights from one person to another. This transaction is usually called an ‘assignment’. The seller assigns the rights to use and occupy the land to the buyer. After the transaction, the buyer applies for a new (statutory) certificate under his name. In this case, the seller acts as the assigner, and the buyer is the assignee. In sum, before purchasing, it is important to make sure that consent from the governor is obtained for the sale. No land can be “sold” without this consent and in majority of cases, the local contacts could use this as avenue to help themselves. This is one of the ways ownership of property in Nigeria could be cumbersome to foreigners. There could also be many other ways that could introduce fatigue for the foreigners whenever the issue of buying and owning property in another country comes into play. The issue of the Land Use Act that has been in use since 1978 converted all land to State Land. The governor of the state is responsible for the management of this land on behalf of the people. Therefore, land cannot be owned privately. The Governor’s consent is needed for the assignment of title to use, occupy, and improve property with a statutory certificate. This certificate does not include rights to sell, give, or sub-let, which requires further consent from the State Governor. At times, the foreigners may not be able to go the endurance trek in order to achieve this. Such endurance could be mistaken for sharp practice on the part of the local contacts or negotiators.

But on the right ring, any foreigner wanting to buy land or property in Nigeria should first of all, google-search to find the real documents; what the country’s policy on lease, titling and acquisition of other documents are before committing some money into it. A peculiarity about purchase of property in Nigeria, particularly in Abuja, Lagos, Enugu Port Harcourt and other areas is the Consent Fee.

The logic is that the state government is the owner of land and, therefore, any change in ownership or assignment, in case of a lease, should have the consent of the governor. There is also a Capital Gains Tax levied at 10 per cent of the difference between the sale price and the original acquisition tax. This is assessed by the Ministry of Finance of any state or the Federal Government as the case may be. Before purchasing, it is important to make sure that consent of the governor is obtained for the sale. No land can be sold without this consent. So, if that is not possible, you can, therefore, imagine what it will cost a foreigner to buy a plot of land by whatever measurement in Eko Atlantic City. But no matter how difficult it is to purchase the land, as long as the right information is given and obtained, anyone, including foreigners, could buy and own the land or the property.

Eko Atlantic City is one of the most ambitious real estate development projects ever undertaken in Africa – a mega city that will provide new homes for 250,000 people and office space for another 150,000 people, simultaneously protecting the coastline and solving Lagos´ chronic shortage of quality housing. It is being constructed on land reclaimed from the ocean adjoining Lagos´ Victoria Island district and the Phase 1 area of Lekki, and it covers around 10 million square metres (10 square kilometres). Sale of real estate, however, does not involve actual selling and purchasing. There is only the transfer of rights from one person to another. This transaction is usually called an ´assignment.

The seller assigns the rights to use and occupy the land to the buyer. After the transaction, the buyer applies for a new (statutory) certificate under his name. In this case, the seller acts as the assigner, and the buyer is the assignee. The buyer/assignee’s lawyer checks the title and other documents presented by the seller/assigner before continuing with the transaction. It is better to be safe, since there are several restrictions and conditions that come with a title, and the buyer has to make sure of what s/he is getting. There are even instances where the assigner is selling land that s/he does not own.

Purchasing property in Nigeria is not without risks – expropriation and others.

Two laws make land ownership uncertain in Nigeria. Although these laws have their counterpart in most countries, it is the implementation that really matters.

The Petroleum Act of 1969 and Land Use Act of 1978 allow the government to take over land under the state´s right to eminent domain. The compensation scheme covers only the “unexhausted improvements” to the land but not the land itself. The value is also fixed to a government rate which was set in the year the law was created. These factors, combined with corruption and years of autocratic rule, mean that uncompensated expropriation of property is common.

Source : https://www.sunnewsonline.com/how-foreigners-can-own-property-in-nigeria/