The Federal Capital Territory and many states are losing trillions of naira to non-payment of ground rents by property owners, Daily Trust can report.
They could earn that much if they enforce efficient rent collection through Geographic Information System (GIS).
Ground rent is a property tax charged and collected by a government on land with a Certificate of Occupancy or Right of Ownership, payable by a property owner within a given period.
Findings by Daily Trust show that few states are enforcing ground rent collection with Lagos, Kaduna and Kano as well as the FCT leading in the collection.
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The Federal Capital Territory Administration (FCTA), last week, said it recovered over N2bn sequel to a two-week ultimatum to property owners.
Hundreds of defaulters had besieged the office of the Abuja Geographic Information Systems (AGIS) to offset their debts.
In FCT, about 66,267 land allottees owe over N34billion, which the minister, Nyesom Wike, vowed to retrieve for infrastructural development.
Already, the FCTA had been publishing defaulters’ plot numbers in national dailies, threatening to revoke their titles if they failed to pay within the allotted time.
Director of Information and Communication, FCTA, Muhammad Hazat Sule, told Daily Trust that it was no longer acceptable not to pay ground rent in the FCT, warning that such titles would be revoked in accordance with the Land Use Act.
‘’The government needs this money for infrastructural development and many other things. I can assure you that the minister will collect this money. If you are a property owner, you’d better come forward within the stipulated time to pay your ground rent, if not, your property is at risk,’’ he said.
According to him, many estates within Abuja city are depriving the administration huge amounts from ground rents by refusing to send the data of their subscribers to the FCTA through the AGIS.
He said: “Every estate owner is required to capture the data of their subscribers to the AGIS, which will in turn issue a Certificate of Ownership to each of the subscribers who will now be paying ground rent. But this is not so because the estate owners don’t want the subscribers to take complete ownership of such property due to service charges they are collecting.’’
He said the administration was working to address this in the interest of all the parties involved.
On why many states are not tapping ground rents to boost their internally generated revenue, the director said: “You know you spend money to get money. Most of the states are only interested in getting the money and that is why some mostly depend on federal allocation.
‘’Here in FCT, we spent a lot to set up the Abuja Geographic Information System (AGIS), to enlighten land allottees on the need to pay ground rent and we also spent money to publish defaulters’ names in the media to serve as caution for others as well as forcing them to pay. Most of the state governments can’t or are not willing to spend such money. The minister is empowered by law to do this,’’ he said.
Ground rent collection can boost states’ IGR
An Abuja-based estate surveyor and valuer, Terungwa Sabe, said collection of ground rent could help states to boost their internally generated revenue.
“Ground rent is enforced naturally so that the government can get funding for its projects. So, if the states embark on it properly, there are a lot of houses and lands that have C of O that can give them a lot of money for some of their projects,” he said.
He said if state governments collect the tax and execute viable projects that have a positive impact on the lives of the people, property owners would be encouraged to pay ground rent.
He noted that sanction for defaulters of the payment of the rent varies from state to state, saying the most common and effective is revocation of titles.
He also said most states lacked the machinery of collection of this particular tax. “When you put in place the right machinery and you have consultants to handle, consultants who can give value to whatever they are doing, you make a fortune from it.
“But when you leave it in the hands of those who think this is not business and they are lackadaisical about it, that is where you have defaulters and the government is not making enough from this revenue source.”
A major challenge for the housing sector has been the lack of accurate data on the number of houses in Nigeria.
Non-payment of ground rent may lead to revocation of titles – Lawyers
Lawyers said the government could revoke titles over non-payment of ground rent.
Abubakar Sanni, Esq, said it depends on the terms of the grant of the titles.
“If, as is usually the case, it is a Certificate of Occupancy, defaulters risk forfeiting their titles subject, however, to prior notice thereof by the government. This is a condition precedent to a valid forfeiture (called revocation) under the law (the Land Use Act).”
Another lawyer, Don Henry, also said non-payment of ground rent could “make government revoke titles, that is, the certificates of occupancy (C of O).”
By Hussein Yahaya, Terkula Igidi (Abuja) & Adelanwa Bamgboye (Lagos)