The housing sector’s numerous taxes have drawn criticism from developers, who blame them for the growing housing deficit in the nation.
The developers claim that people’s reluctance to regularize their landed property is partially due to taxes.
Multiple taxation is one of the main issues in every industry in the nation, according to Dr. Kolade Adepoju, chief executive officer of Riel Homes, in an exclusive interview with The PUNCH.
He declared, “If the multiplicity of taxes can be reduced, it will lessen the deficit gap in the housing sector. Multiple taxes are paid on building materials when they are shipped at the port, and numerous legal and illegal taxes are levied.
But since the new administration has a tax reform committee, I think those loopholes ought to be closed. “
Additionally, Olorunyomi Alatise, an estate surveyor, claimed that one of the reasons people were hesitant to regularize their landed property was the multiplicity of taxation in the housing sector.
“You recently purchased a property and are attempting to process your Certificate of Occupancy, but at this point, part of the things you need is a tax clearance, and a tax clearance is evidence that you do not owe the state, he said. Additionally, you will be required to pay capital gains tax, the tenement rate (which has been combined with the land use charge), and other taxes. By the time they list all the different taxes you have to pay, you realize it is a lot for someone who just bought a property. “
Multiple taxes being imposed on the industry, in Alatise’s opinion, are improper and a major cause of the opaqueness of real estate transactions.
“The economy of a country will suffer if different taxes are levied on the same source of income because it may deter both domestic and foreign investors. It is a significant problem in Lagos, especially given that the state’s various tax agencies frequently contact local businesses. Additionally, as a result of this, some foreign investors’ businesses have relocated, he claimed.
The managing director of Fame Oyster and Co. Femi Oyedele emphasized that the government should look into ways to lessen the burden of various taxes in the housing sector in a country like Nigeria, which faces a significant housing deficit.
He said, “Consumers of housing products are made to pay value-added tax, health and safety approval fee, ground rent, tenement rate, and neighbourhood improvement tax.
“In some states, house owners and or occupiers pay land use charge, which is a combination of tenement rate, ground rent, and neighbourhood improvement tax. Developers also pay building plan approval charges and exorbitant prices to procure an all-important Certificate of Occupancy. I think all these are not in tandem with our aim of ensuring affordable housing in Nigeria.”
According to Oyedele, multiple taxes add to the prevailing high cost of housing in Nigeria.
He suggested, “Making houses available, one of the measures the government can take is to reduce taxes on housing and increase inheritance tax and capital gain tax. Taxes are instruments to control consumption, inflation, savings and practices. We need to tax abandoned property more than we tax cement manufacturers. We need to collect mandatory ground rent on property owners then we collect commercial shop owners’ fees, etc.”
