Tenants Now to Pay Six Percent Stamp Duty, Says FIRS

THE Federal Inland Revenue Service (FIRS) has directed landlords and property agents to charge six percent Stamp Duty on all tenancy and lease agreements.

The  landlords/ property agents  are   to  remit such collections     to FIRS “so that they do not run foul of the Stamp Duty Act.”

The tax agency gave the directive through a statement on Wednesday by Director, Communications and Liaison Department Abdullahi Ahmad.

He said: “Property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts six percent duty payable in the percentage of the total value or sum of the tenancy or lease,” Ahmad explained in the statement.

According  to him, the burden of payment of the six percent “lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.”

He added 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.”

Some other Stamp Duty types and their rates, according to the statement, are; Appraisement or Valuation of Property, .5 percent; Certificate of Occupancy and  Partnership, N1,000 flat rate; Gift of Land, 1.5 percent and Legal Mortgage, 0.375 percent.

Others are Legal Mortgage (Upstamping), 0.375 percent; Deed of Conveyance or Transfer on Sale of Property,  1.5 percent; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 percent; Power of Attorney (Irrevocable/Land Related), 1.5 percent and  Sales Agreement, 1.5 percent.

Stamp Duty payment is enabled by the Stamp Duties Act (SDA) 1939, as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria. The SDA also provides a list of documents in its schedule and the duty payable on each.

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.