Operators within the built environment have estimated that Nigeria is losing approximately N36 trillion annually due to untitled lands.
This staggering figure highlights the significant financial impact of informal land ownership on the country’s economy.
The cost of land registration can vary widely based on location. However, real estate professionals have averaged the registration fee for a plot of land in Nigeria at about N1 million, which serves as the foundation for this financial estimation.
According to The PUNCH, in an exclusive interview, the Financial Secretary of the Nigerian Institution of Estate Surveyors and Valuers, Ayodele Odeleye, emphasized the gravity of the situation.
He pointed out that out of the estimated 40 million households in Nigeria, only around 10 percent possess formal property titles, which are recognized by the government and subject to various taxes and regulatory fees.
Odeleye explained, “The total number of households in Nigeria is about 40 million, according to the Nigerian Bureau of Statistics and the Centre for Affordable Housing Finance in Africa. In addition, the percentage of households with formal property titles is about 10 percent, as noted by the housing minister. Hence, households without formal property titles (informal housing market) equal 90 percent of 40 million, which is 36 million households.”
He elaborated on the revenue loss, stating, “On the revenue lost per household, this depends on what the government would typically earn from a household with a formal property title (e.g., property taxes, registration fees, income tax, building permits, and licenses, etc.). Let’s assume the government could collect an average of N1 million annually per household with formal property titles. The total potential revenue from informal households is estimated by multiplying 36 million households by N1 million per household, which amounts to N36 trillion annually. Thus, the government potentially loses about N36 trillion annually in revenue due to the informal housing market. This is a rough estimate, and the actual figure could vary based on specific taxes, fees, and charges applicable in different regions of the country.”
Adding to this discussion, an official from the Lagos Ministry of Land Bureau, who requested anonymity due to restrictions on speaking publicly, highlighted the variations in land registration costs across different Local Governments.
He mentioned, “Registration for a plot of land in a place like the Epe area of Lagos would total N4.5 million, particularly if such a person is not a civil servant.”
Land developer Dr. Kolade Adepoju provided insights from his recent experience, noting, “I recently completed the documentation of 10 hectares of land at Ibeju Lekki for N600 million, of which I estimated the cost to be around N4-5 million per plot.” He further stated, “On average, per plot, to get a land title is close to N5 million.”
The Chief Executive Officer of Fame Oyster & Co., Olufemi Oyedele, added context by discussing regional pricing variations, “In Ikeja, for a plot of land that is 648 square metres, it is about N3.5 million. The payment for land registration in 1991, for example, was about N20,000. But things have astronomically gone up. The cost of purchasing land, constructing buildings, and the rents being charged have all increased significantly. In any case, land registration should not exceed 2.5 percent of the value of land to conform to global best practices. There are other ways of generating income from land apart from land registration. There are ground rents, tenement rates, and neighborhood improvement tax, which have been fused in some states as land use charges. There are others like inheritance tax, capital gains tax, withholding tax, building approval fees, etc. The land registration cost in some states is on the high side. If prospective property owners feel the land registration charges are exorbitant, they can make a representation to the governor of the state for review.”
Legal practitioner Tejideen Oluwadare from Ota, Ogun State, emphasized the significance of land value in determining registration costs, “The value of the land matters, and now lands in suburban areas of Ota go as high as N20 million and above. For the titling of land up to the perfection stage, it is close to N5 million, if not more than that.”
Another legal expert, Hassan Yakubu, echoed Oluwadare’s sentiments while affirming the N5 million estimate in Ogun State.
He pointed out that bureaucratic bottlenecks contribute significantly to the high costs of land documentation, stating, “You must take into account that a Certificate of Occupancy, after conducting surveys and obtaining other assessment fees from the Lands Bureau, takes time. Therefore, you will have to set aside money for public relations to ensure staff expedite the process.”
In a concerted effort to address the issue of untitled land, the Ministry of Housing and Urban Development, in collaboration with the World Bank Group, pledged in September to tackle the alarming 90 percent of unregistered and untitled land in Nigeria, marking a significant step towards formalizing land ownership and potentially alleviating the financial losses facing the nation.
