Taxation of high-value residential property has moved up the policy agenda in Nigeria, and
owners of expensive homes have been left unsure what they actually owe and when. A great deal of
what circulates online describes proposals as though they were already law.
This guide separates the two, and sets out what owners of high-value property should check
regardless of how the policy develops.
This is a general summary, not tax advice. Rates, thresholds and the authorities involved
change. Confirm the current position with the relevant tax authority or your adviser.
Three different taxes people confuse
Most of the confusion comes from treating separate charges as one thing.
| Charge | What it applies to | Collected by |
|---|---|---|
| Land Use Charge | Land and buildings, annually | State government |
| Ground rent | Land held under a Certificate of Occupancy | State government (within Land Use Charge) |
| Capital gains on disposal | Profit on selling property | Federal, through FIRS |
Land Use Charge and ground rent are recurring annual obligations attached to owning the
property. Capital gains tax arises only on disposal. A proposal to tax high-value homes would sit
alongside these, not replace them — and it is a proposal, not current law, until it is passed and
commenced.
What the high-value property tax proposal covered
As reported at the time, the proposal targeted residential property above a high value threshold
in major cities, with an annual charge calculated as a percentage of market value, and with the
revenue directed toward affordable housing and urban renewal.
Two cautions. First, a proposal of this kind changes as it moves through the
legislative process — thresholds, rates and exemptions are exactly the details that get amended.
Second, market value is not a fixed number: it depends on valuation, and valuation disputes are
the predictable consequence of any value-based property tax.
If a tax of this kind does take effect, how your property is valued will matter at least
as much as the rate applied to it.
Why value-based property taxes are difficult in practice
- Valuation capacity. Assessing every property individually requires a
valuation infrastructure most states do not yet have at scale - Disputed values. Owners will contest assessments, which requires an appeal
mechanism that functions - Collection. Property taxes are notoriously hard to collect where records of
ownership and occupancy are incomplete - Liquidity. Property is illiquid. An owner whose income has fallen can still
face a charge based on the property’s market value - Double taxation concerns. Where states already levy Land Use Charge,
layering a further value-based tax raises the question of what the total burden becomes
What this means if you own high-value property
Establish what you already owe
Before worrying about a new tax, confirm that Land Use Charge is paid and current. Unpaid charge
is a live risk to your title — it can breach the conditions of a Certificate of Occupancy.
Keep your valuation evidence
If a value-based tax arrives, the assessment will start from an assumed value. Keep your own
record: purchase documents, recent comparable sales, any professional valuation, and evidence of
condition. Owners with documentation contest assessments far more successfully than those
without.
Model the carrying cost
Add the potential charge to your existing annual outgoings — service charge, insurance,
maintenance, Land Use Charge. For a high-value property the sum matters, and it affects what the
asset is actually worth to hold.
Watch the details, not the headline
The rate always gets the attention. The threshold, the exemptions, the valuation basis and the
appeal process determine what you pay. Read those when the legislation is published.
If you are buying
Ask whether Land Use Charge and any other property charges are paid up to date, and check
whether liability attaches to the property rather than to the seller personally. An arrears
position should be quantified and dealt with before completion, not after.
Frequently asked questions
Is there a new property tax on luxury homes in Nigeria?
A proposal of that kind has been reported, but proposals are not law. Until legislation is
passed and commenced, what applies is the existing framework — principally Land Use Charge and the
ground rent obligations within a Certificate of Occupancy.
How is property value assessed for tax?
Value-based property taxes depend on valuation, usually on an assumed market value. That is
precisely where disputes arise, which is why the appeal mechanism matters as much as the rate.
Will this replace Land Use Charge?
Not necessarily. Land Use Charge is a state charge on land and buildings; a federal tax on
high-value property would be a separate instrument. Whether both apply, and to whom, is a question
for the legislation rather than for assumption.
Can I be taxed on property I do not rent out?
Property taxes are generally levied on the property rather than on the income it produces. An
unlet or owner-occupied property can therefore still attract an annual charge.
Related guides
- Can unpaid Land Use Charge cost you your title?
- Lagos Land Use Charge 2026 update
- Real estate finance and tax
The short version
Taxation of high-value property has been proposed, not enacted. What applies today is Land Use
Charge and the ground rent obligations inside your Certificate of Occupancy — and unpaid charge is
a genuine title risk. If a value-based tax does arrive, the valuation will matter as much as the
rate, so keep your own evidence of value now.
