The Federal Inland Revenue Service (FIRS) has ordered all property owners and their agents to charge 6% Stamp Duty on all tenancy and lease agreements they enter into with all leasees and remit promptly to the Service.
This was disclosed by the Director, Communications and Liason Department, FIRS, Mr Abdullahi Ahmad, in Abuja on Wednesday, according to News Agency of Nigeria.
Ahmad explained that the directive was given so that they would not run foul of the Stamp Duty Act.
Nairametrics reported recently when FIRS announced that stamp duty will be paid on house rent and Certificate of Occupancy (C of O), in line with its new adhesive duty.
The agency explained that the new policy was necessary so as to give the instruments the legal backing required, and make them legally binding on all parties involved in such transactions.
Ahmad stated that property-related transactions like tenancy or lease agreement fell under the Ad Valorem category of the stamp duty which attracted 6% duty payable in percentage of the total value or sum of the tenancy or lease.
According to FIRS, the burden of payment of the six per cent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.
How it works: The responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent.
He said, “In any case, the party making the payment shall have the obligation to account for the applicable stamp duties.
“Some other Stamp Duty types and their rates are Appraisement or Valuation of Property, 1.5 per cent; Certificate of Occupancy, Partnership N1,000 flat rate; Gift of Land, 1.5 per cent Legal Mortgage, 0.375 per cent, Legal Mortgage (Upstamping) and 0.375 per cent.”
Others are deed of Conveyance or Transfer on Sale of Property, 1.5 per cent: Gift of Land, 1.5 per cent Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 per cent, Power of Attorney (Irrevocable/Land Related), 1.5 per cent and Sales Agreement, 1.5 per cent.