Surveyors see increased market liquidity on Lagos 3% land transaction fee

Part of the fallouts of the drop in land tax charge in Lagos State from 13 percent to 3 percent is increased liquidity in the state’s real estate market, estate surveyors and valuers have said.

The estate professionals under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV), Lagos State branch, said at a press conference in Lagos that the landmark drop in land transaction cost would boost investment appetite and also grow the state’s revenue from real estate. 

According to them, the fair market value as contained in the new transaction cost would encourage a global trend whereby the rich pay more for services as property buyers would now pay charges in tune with market reality of their desired location.

The Lagos state government had before the new executive order, hinged property transaction fees and charges across the state on obsolete values which did not conform to current market offerings.

Stephen Jagun, chairman, NIESV, Lagos state branch, noted that while the slash in charges will imply higher transaction fees for high end properties, it will also lead to lower fees for properties in low income areas, a scenario, he said, was the norm globally.

“Everywhere in the world, people who desire luxury are supposed to pay more and this is what the Lagos state government has done by embedding the concept of ‘fair market value’ in the new order,” Jagun said.

He said that it had been a common practice for people to refuse or abandon their documentation process after purchasing properties due to perceived high and unrealistic transaction fees, thereby, resulting in a significant loss of revenue to the state government.

Jagun however, said that this trend would be effectively addressed with a law where property buyers have to be levied in line with current market realities.

“If the environment is attractive and inviting, people will see the need to pay the right charges on any transaction they intend to execute,” he said, adding that the new order would also lure more investors into the real estate market.

With his institution recognised as the professional body saddled with the responsibility of determining property value in the country, Jagun urged prospective property buyers to engage the services of professionals, noting that values slammed on some properties in some locations were outrageous.

He dismissed allegations that the new price slash was politically motivated, noting that the institution had severally advised the government on the need to reduce the land charge.

“Since the last quarter of 2012, we had presented our position through the President of our Institution and several meetings have been held thereafter with senior government officials.  We believe that this culminated in the result we have today,” he said, pointing out that there was still room for improvement.

ODINAKA MBONU