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FIRS INTRODUCES STAMP DUTIES ON RENT AND CofO TRANSACTIONS

According to FIRS 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.

 

The Federal Inland Revenue Service (FIRS), as part of measures to reduce disputes in real estate related transactions and generate more revenue, has announced that stamp duty will be paid on house rent and Certificate of Occupancy (C of O) as well as other real estate instruments in line with its new adhesive duty.

The Federal Inland Revenue Service (FIRS) has made available detailed information to guide landlords, agents and tenants on rates payable as stamp duty.

 

The FIRS stamp duty on rent or lease only applies to new agreements and not to renewals. If a new agreement is drawn up at renewal, that document should be stamped, just like initial agreement.

If, however, the renewal terms are already in the initial agreement such that no new document is prepared but just payment of the rent for renewal, then no stamping is required.

 

Stamp duty should not make any landlord to increase his or her rent because it is not paid by the landlord. It is the responsibility of the tenant to pay stamp duty and you don’t have to give it to your landlord.

As a tenant, calculate 0.78% of your rent and pay that fraction at the FIRS office nearer to you or at your bank. You should then fix the stamp duty imprimatur on the tenancy agreement before you sign it with your landlord. It is as simple as that.

Stamp duties rate on Rent/leases is graduated depending on the number of years in the agreement as follows;

1-7 years is 0.78%

7-21 years is 3%

21 years and above is 6%

Other stamp duties and their rates applicable are;

Certificate of Occupancy, partnership attracts N1000 flat rate

Legal Mortgage 0.375%

Appraisal or Valuation of property  1.5%

Gift of Land 1.5%

Deed of Conveyance or Transfer on Sale of Property 1.5%

Memorandum of Understanding (related to Land, Sales, Joint Venture, Surrender, Sub-division Agreements 1.5%

Power of Attorney 1.5%