FIRS tasks landlords, property agents on 6% tenancy, lease agreement
BY COBHAM NSA, ABUJA – Heightened fears and anxiety over imminent rent hike are running wild among tenants in Abuja, the Federal Capital Territory (FCT) following the Stamp Duty directives issued to landlords and property agents by the Federal Inland Revenue Service (FIRS).
The panic button being pressed by tenants is coming on the heels of the new order that makes it mandatory for all property owners and their agents to henceforth charge six (6) per cent Stamp Duty on all tenancy and lease agreements with all renters.
With the landlords and property agents expected to remit same promptly to FIRS as not to run foul of the existing Stamp Duty Act, many tenants, currently occupying residential as well as commercial premises are anxious that despite the economic drawbacks occasioned by COVID-19 pandemic, they will now have to bear the brunt of this new arrangements by government.
Dropping hints of strict observance of the new order, Executive Chairman of FIRS, Mr Muhammad Nami said property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts six (6) per cent duty payable in percentage of the total value or sum of the tenancy or lease.
Nami, who spoke on the recent release and wide circulation of a stamp duty clarification guide by the Service, said the burden of paying the six (6) per cent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.
Similarly, Nami explained that the responsibility of collection and remittance falls squarely on the landlord or agent in charge of the property for lease or rent.
A statement issued on Wednesday by Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad, quoted the Executive Chairman as saying that; “in any case, the party making the payment shall have the obligation to account for the applicable stamp duties.”
According to the statement, other Stamp Duty types and their rates include: Appraisement or Valuation of Property – 1.5%; Certificate of Occupancy, Partnership – N1,000 flat rate; Gift of Land – 1.5%; Legal Mortgage – 0.375%; and Legal Mortgage (Upstamping) – 0.375%
Also listed are: Deed of Conveyance or Transfer on Sale of Property – 1.5%; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements – 1.5%; Power of Attorney (Irrevocable/Land Related) – 1.5%; and Sales Agreement – 1.5%