Type of Taxes Nigerian Landlords normally pay

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Posted by Chidinma on Saturday August 30, 2014 at 11:38:28:

In Nigeria, much value is placed on the issue of becoming a Landlord as most people have the ultimate dream of building their own houses and fixing tenants instead of staying in some elseís house as a tenant.

In fact, becoming a Landlord is the American dream of most Nigerians, for both young men and old men alike, even some women now wish to become landlords these days. Becoming a Landlord in Nigeria has a lot of advantage, apart from the fact that you are free from the monthly, or yearly payment of house rent, it is a good source of investment, as you can place other persons in the house as tenants and receive monthly or yearly house rent from them. But one thing most people wishing to become Landlord donít know is that, becoming a Landlord does not exempt you from paying certain taxes and rates. In this article, I will mention a tax that Landlords are expected to pay here in Nigeria;

- Land Use Charge/Tenement rate: Many people are not familiar with this tax. The law states that all the lands in Nigeria belong to the government, and the lands are just leased to the Landlords, and they are expected to pay a form of royalty tax on an annual basis. The land use charge is usually calculated at 0.375 percent of the total estimated value of the land and any property on it. Also note that this can vary in different states and local government areas. Landlords are expected to pay the Land use charge or tenement rate yearly.

- Rental tax: Landlords are also expected to pay income tax on lands they own if they rent it out to tenants and collect rent. The rent collected is regarded as passive income and they are expected to report and pay it to government as part of their Personal income tax. If the Landlord doesn't collect nay rent, then he is not liable to pay tax on rent received.






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