THE Federal Inland Revenue Service, on Wednesday, said that any tenancy or lease agreement that is entered into with all renters must attract six per cent as Stamp Duty.
This, it said, must be remitted promptly to the FIRS.
The Service said the remittance was vital so that landlords and property agents would not run foul of the Stamp Duty Act.
Stamp Duty is a tax payable in respect of dutiable instrument, as provided under the Stamp Duties Act, CAP S8, LFN 2004 (as amended).
With the imposition of the six per cent tenancy agreement charges, it is expected that the cost of renting a property may increase.
The Executive Chairman, FIRS, Muhammad Nami, said in a statement that property-related transactions, like tenancy or lease agreement, fell under the Ad Valorem category of the Stamp Duty, which attracts six per cent duty payable in percentage of the total value or sum of the tenancy or lease.
The statement was signed by the Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad.
It said, based on the provisions of the Stamp Duty Act, which identified the tenant or renter as those that would bear the burden of payment, the responsibility of collection and remittance fell on the landlord or agent in charge of the property for lease or rent.
According to the statement, other Stamp Duty types and their rates include Appraisement or Valuation of Property, 1.5 per cent; Certificate of Occupancy, Partnership, N1,000 flat rate; Gift of Land, 1.5 per cent; Legal Mortgage, 0.375 per cent; Legal Mortgage (Upstamping), 0.375 per cent; and Deed of Conveyance or Transfer on Sale of Property, 1.5 per cent.
There is also a 1.5 per cent Stamp Duty imposed on Gift of Land; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 per cent; Power of Attorney (Irrevocable/Land Related), 1.5 per cent; and Sales Agreement, 1.5 per cent.
Nani had, on Tuesday, warned that it was the responsibility of Ministries, Departments and Agencies, Money Deposit Banks, Companies, Landlords, Executors, etc. to ensure that service providers, contractors, tenants etc., pay stamp duties due on agreements, receipts and other dutiable instruments.
“Failure to deduct or remit stamp duties into the Federal or State Stamp Duties Account attracts relevant penalties and interest as stipulated in the Stamp Duties Act, Cap S8, LFN 2004 (as amended),” he had warned.
