Outcry As FIRS Directs Landlords, Property Agents To Charge 6% Stamp Duty From Tenants

Federal Inland Revenue Service (FIRS) has directed landlords and property agents to charge six per cent stamp duty on all tenancy and lease agreements.

In a statement, FIRS said the burden of payment of the six per cent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.

FIRS gave the directive in a statement on Wednesday by Director, Communications and Liaison Department Abdullahi Ahmad.

The landlords and property agents, according to Ahmad, are to remit such collections to FIRS “so that they do not run foul of the Stamp Duty Act.”

Stamp Duties payment is enabled by the Stamp Duties Act (SDA) 1939, as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria.

The SDA also provides a list of documents in its schedule and the duty payable on each.

The Finance Act 2019 states that;

The Federal Inland Revenue Service shall be the only competent authority to impose, charge and collect duties upon instruments specified in the Schedule to this Act if such instrument relates to matters executed between a company and an individual, group or body of individuals.

Ahmad stated;

Property-related transactions like tenancy or lease agreement fall 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.

He stressed that the burden of payment of the six per cent “lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.”

Ahmad stated that the responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent.

Many Nigerians on social media have however decried the move, saying it is an avenue to cause more hardship for tenants.

See some reactions below;

Because i want to rent house now, i would pay 6% of that to government again.

So that FIRS people would be spending 3 billion naira per day just like their counterpart in the NDDC.

This is as a result of 2015 error where we voted in a demonic govt of evil and hardship.

— Tosin Olugbenga (@TosinOlugbenga) July 23, 2020

FIRS to begin implementation of 6% Stamp Duty on rent which is to be paid by tenants. It means that as a new tenant in Lag for example, u will pay the following before moving into the house:
1. Rent
2. Agency fee 10% of rent
3. Legal/Agreeemnt 10% of rent
4. Stamp duty 6% of rent

— Senior Man (@KingEsene) July 23, 2020

Let me break it down for us. So if u are moving into an apartment and ur rent is 300k yearly, you will pay the following as total package:
1. Rent- 300k
2. Agency 10% of rent- 30k
3. Legal 10% of rent- 30k
4. Stamp duty 6% of rent- 18k
Total= 378k.
Some agents demand more % o.

— Senior Man (@KingEsene) July 23, 2020

This 6% stamp duty on rents no matter how you look at it, makes no sense.

Landlords will of course increase rents but not remit it.

An avenue created for property owners and agents to extort.

No formal database of housing… How will FIRS track?

— Wale Adetona (@iSlimfit) July 23, 2020

This FIRS tax won't affect village people ba?
We go leave Town for una!

— Olofu (@sheiduhabib_) July 23, 2020

https://twitter.com/Danny_Walterr/status/1286197220115718144?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1286197220115718144%7Ctwgr%5E&ref_url=https%3A%2F%2Fwww.mojidelano.com%2F2020%2F07%2Foutcry-as-firs-directs-landlords-property-agents-to-charge-6-stamp-duty-from-tenants%2F