By an executive order, Lagos State Governor – Babatunde Fashola has reduced land transaction fees by 77%. The order signed on the 5th of January 2015 is effective immediately and reduces fees from 13% to 3%.
The order explained that the Lagos State Government (LASG) is committed to improving the ease of doing business and minimizing transaction costs. According to the Ease of Doing Business Report by the World Bank Group, the process of registering property in Nigeria saw no change in 2013 and 2014 at the 185th position of 189 countries.
This effort from the LASG is commendable and will have positive implications for the property market across board. If implemented appropriately, the reduction in fees could motivate investment and speed up their respective timelines for players in the real estate space including private high and low-end developers, real estate funds, REITs and institutional investors. Additionally, it can improve mortgage lending as the cost of perfecting a legal mortgage now stands at 0.25% of the loan amount down from an estimated 8%
Consent Fees, Capital Gains Tax, Stamp Duty and Registration Fees are now 1.5%, 0.5%, 0.5% and 0.5% respectively.