Prior to the enactment of the Land Use Act, 1978 (“the Act”), land could be held under freehold ownership in Nigeria. However, the Act now vests control and administration of all land within the territory of a State in the Governor of the State. By this, freehold ownership has been abolished and converted to leasehold ownership. The Act also empowers the Governor of a State to grant rights of occupancy over lands within the State for a maximum term of 99 years. By Section 49 of the Act, title to land can be held by the Federal Government or any of its agencies.
Private ownership of land is recognized but it is subject to the rights of the State Government or Federal Government to the reversion of the interests after the expiration of the term granted to the owner, such terms of years on expiry are renewable continuously subject to compliance with the conditions of grant and renewal imposed by the State.
Also, private ownership of land can before expiry of the term be terminated by revocation for breach of the terms of the grant or provisions of State regulations or by State acquisition where the property or land is required for public use or purposes.
Last modified 22 Apr 2026
Generally, all lands are vested in State Governors who hold and administer same in trust for the use and benefit of all Nigerians citizens.
Section 22 of the Land Use Act provides that it shall not be lawful for the holder of a statutory right of occupancy granted by the Governor to alienate his right of occupancy or any part thereof by assignment, mortgage, transfer of possession, sublease without the consent of the Governor, a provision which applies to foreign investors and Nigerians alike.
By the Acquisition of Lands by Aliens Law of Lagos State (ALAL), a foreigner/Alien may acquire land in the state, however such acquisition is subject to the approval of the Governor of the State. The consent of the Governor of the State shall however not be required where the interest acquired is for a period less than one year.
An Alien under the ALAL has been defined to include a company in which the majority of its shareholders are foreigner.
Also, by Section 28 of the Lagos State Real Estate Regulatory Authority Law 2022, a Nnon-Nigerian who wishes to invest in real estate is required to obtain the permission of the Governor and the term of years to be granted to a foreigner will not exceed 25 years including any option to renew.
We however advise that notwithstanding the above restrictions, a foreign investor can acquire real property in Nigeria through a company or other corporate vehicle duly incorporated under the laws of the Federal Republic of Nigeria. Section 17 of the Nigerian Investment Promotion Act, 1995 also provides that a non-Nigerian may invest and participate in the operation of any enterprise in Nigeria. Any company that is empowered by any law to acquire land in Nigeria can do so like a citizen whether it is owned by a foreign investor or a Nigerian.
Last modified 22 Apr 2026
The state grants evinced in the Certificate of Occupancy usually provides that the holder of the title shall not alienate the rights granted within 10 years of the grant and is obliged to first offer the property to the Governor. In practice, upon the sale of real property within the 10-year period of the state grant, an additional fee (about 1.5 % of the value) will apply at registration of the transfer.
Also, by the Acquisition of Lands by Aliens Law, a foreigner who has lawfully acquired interest in a land shall not dispose of same without first offering it to the State Government (Section 2(3) of the ALAL).
In a private sale, the contracting parties may by agreement covenant that a property is not to be sold to a third party without first offering it to the seller on terms as agreed in the document.
Last modified 22 Apr 2026
The Constitution of the Federal Republic of Nigeria 1999 and the Land Use Act 1978 are the major uniform laws for the entire country. There are, however, other subsidiary legislations regulating property transactions within the respective 36 states and the Federal Capital territory which include but are not limited to the following:
Last modified 22 Apr 2026
The laws regulating transfer of interests in land apply generally to all categories of real estate.
Last modified 22 Apr 2026
The transfer of title and interests in real property is required by law to be in writing and by deed duly executed by the parties. The parties to the transfer transaction are required to fill and sign the relevant forms of application for consent of the Governor to alienate the interests in real property along with a formal application for registration of the interests.
The payments of applicable statutory transaction taxes and transfer fees such as Capital Gains Tax, Stamp Duty, Consent and Registration fee and other outstanding land charges are required for the registration of the transfer Deeds to lawfully vest title in the real property to the purchaser.
Last modified 22 Apr 2026
There are Land Registry Offices in all states of Nigeria where the registers and records of all real property in urban areas are registered and updated as further real estate transactions occur.
There are however, no registries for title or records of ownership rights for undeveloped lands in rural areas, however, all lands within a state are covered by the geometric survey plans prepared by the State’s Surveyor General and kept in the survey departments of the states where land information confirming state rights and purpose can be obtained by an intending purchaser.
An investor in real estate in a rural land that is unregistered and free from government acquisition may after purchase from the customary owners apply to the State Governor for a direct grant of the right of occupancy.
Title insurance against losses due to defects in owner’s title in real property is not common in Nigeria.
Real estate title records are duly documented in the Register of Deeds securely kept at the respective States’ Lands Registry Offices and in the respective states in Nigeria and the Federal Land Registries in Nigeria. The register is an authoritative record of the interests in specific properties. All subsequent transfer of interests in real property are registered in the respective files as a charge and record of the transfer of the title to the purchaser or assignee.
Last modified 22 Apr 2026
Upon a satisfactory due diligence by the parties and consensus on the transaction costs, completion of the real estate transaction includes preparing and execution of the relevant documents which depend on the nature of the transfer transaction. The usual documents are Sale and Purchase Agreement, Deed of Assignment or Deed of Lease or Sublease and Power of Attorney (optional).
The application form for Consent of the Governor (or Minister for Federal Government owned titles) signed by the seller or lessor is a mandatory requirement.
Upon execution of the relevant documents and transfer of possession of the property to the purchaser or lessee, the process for obtaining consent of the Governor (or Minister for Federal Government land interests) and registration of the transfer of interests should commence subject to payment of the applicable taxes and fees.
Last modified 22 Apr 2026
Conducting due diligence on title to the property and the capacity of the seller to alienate the interests is the discretion of the buyer. It is a necessary process to be carried out for the buyer’s protection and it is usual in the transfer of title process for the buyer to instruct a solicitor to conduct due diligence to ascertain the title and interests in the real property, the land use and zoning purpose, existence of external or third-party interests, the residue or the term of years under the title, compliance with physical planning, fire safety and environmental regulations as applicable, the payment status of applicable charges and levies and the status and capacity of the seller.
Last modified 22 Apr 2026
In Nigeria, the Land Use Act provides that the consent of the Governor is required for any alienation or transfer of interest in real property. In practice, it is after completion of the transfer that consent is processed together with the registration of the deed of transfer.
The consent of a partner, joint or co-owner of the interests in real property must be sought for there to be a valid transfer of the title by a seller. A spouse who is a co-owner on the records of title in real property must give consent for any sale to be valid, otherwise spousal consent is not required.
Where the property is owned by a company, the resolution of the members or the directors of the company is necessary for the sale of the interests in the property. Furthermore, the Companies and Allied Matters Act 2020 provides that a major asset transaction must be approved by 75% of the votes cast by the members of the Company at a general meeting. A transaction is a major asset transaction where it involves a purchase or sale or other transfer outside the usual course of the company’s business of the company’s property or other rights the value of which, on the date of the company’s decision to complete the transaction, is 50% or more of the book value of the company’s assets based on the company’s most recently compiled balance sheet.
A liquidator duly appointed for a company in liquidation, must give consent to any sale.
All named executors or administrators of an estate of a deceased and upon grant of letters of probate by the High Court must give consent for the transfer transaction to be valid.
Generally, where alienation of the interests in property is subject to the consent of the overlord or head-lessor with the right of reversion, any alienation of the interests or any portion of same must be with the consent as agreed in the agreement for the property.
Last modified 22 Apr 2026
An agreement for the sale of property must be in writing and by deed, it must also state the date of the transaction, details of the parties, describe the exact property, recite the root of title, state the consideration or purchase price, be properly executed by authorized persons and duly witnessed.
The parties are at liberty to agree on the terms of the transaction and the warranties which each undertake to provide to the other party.
The features of typical agreement states the parties full identity and details, the title history of the property, its location and description including the area of land it is comprised, the agreed purchase price and mode of payment (lump sum or instalment), residue of the term of years, sellers warranties to deliver possession, undisturbed enjoyment and assist with all information toward the registration of the buyers interest, delivery of sellers title deeds and other property documents to the buyer, indemnity against defects in title and provision for dispute resolution.
Last modified 22 Apr 2026
There are no sellers’ warranties provided by the law with respect to the state and condition of the building. The parties are at liberty to agree the specific warranties to apply to each party.
Last modified 22 Apr 2026
The buyer is at liberty to treat the agreement as terminated and thereby claim damages. The parties may by their agreement specify the amount of the damages payable by inserting a limitation of liability clause in the agreement.
Generally, the buyer will be entitled to recover damages to cover any losses suffered as a result of the seller’s misrepresentation.
The nature of the misrepresentation will determine the action that the buyer may pursue against the seller. Where upon investigations, the seller is shown to have been deliberately fraudulent in the misrepresentation to the buyer, the Police and other agencies of state may prosecute the seller under the relevant extant criminal laws in the country.
Last modified 22 Apr 2026
The Land Use Act, Companies and Allied Matters Act, Nigerian Investment Promotion Act 1995 and Tax legislations are Federal statutes applicable uniformly. The other legislations are enactments of the respective States, but with similarities in most of the states.
Last modified 22 Apr 2026
The law requires for an environmental impact assessment to be carried out by professionals and a report issued and filed with the relevant town planning and building control agency of the state. The nature of the building construction or development determines whether the environment assessment report is required (Environmental Impact Assessment Act, 1992 and Nigerian Urban and Regional Planning Act No. 88, 1992). This is to ensure that the potential environmental hazards posed by a proposed building development are identified prior to construction and adequate mitigation actions are put in place.
Generally, the owner, tenants and occupiers of property are directly responsible for the environmental sanitation of their premises and it is not an excuse that the pollution or contamination was caused by another person. The federal and state laws impose liability for causing pollution or contamination and impose liability for non-compliance by owners of buildings.
The buyer or owner of real estate has a responsibility for the environment sanitation of the property but will not be liable for any offence where the pollution or contamination to the property is caused by a third party’s action if the owner is not contributory thereto.
Last modified 22 Apr 2026
The permitted uses or purposes for a land or property are usually indicated in the title deeds that are lands certificates or grants directly from the state. Usually the land certificates indicate whether it is granted for ‘residential’, ‘commercial’ or even ‘mixed development’. The lands certificates may sometimes be more specific on the nature of the business to be carried out and building development permitted on the real estate.
It is also prudent for a buyer to apply to the relevant state physical and town planning office for ‘Planning Information’ as to ascertain the land use and zoning for the area where the property is located and the permissible use.
Last modified 22 Apr 2026
A private investor (foreign or local) can negotiate with the government or through the relevant agency for development agreements for specific projects in Nigeria.
The Nigerian government have in recent years actively engaged and promoted development projects and infrastructures through public-private partnerships which it considers as a mechanism to stimulate economic development and growth in Nigeria. Foreign investors are specifically encouraged to invest in the country with the government at all levels with the federal and the state government establishing dedicated offices to ensure the ease of doing business in Nigeria.
The Infrastructure Concession and Regulatory Commission (ICRC) Act 2005 established the Infrastructure Concession Regulatory Commission responsible for regulating PPP processes in Nigeria.
There is the Presidential Enabling Business Environment Council (PEBEC) which was set up to focus on removing bureaucratic constraints to doing business in Nigeria and making the country an increasingly easier place to start and grow a business. Also, the Nigerian Investment Promotion Commission is charged with encouraging, promoting and regulating foreign investments in the country.
Last modified 22 Apr 2026
Only the state (government) can forcibly acquire or expropriate property in Nigeria. Section 28 of the Land Use Act empowers the Governor to compulsorily acquire property where the land is required for overriding public purpose by either the State Government or the Federal Government and compensation is payable to the owner of the land. Where land is acquired by government for overriding public purpose, fair and reasonable replacement costs is payable to the owner as compensation.
The other reason for which property can be expropriated is where the owner of the property is in flagrant breach of the terms or conditions for the grant of the right of occupancy like failure to pay ground rents (land use charges), disregard for town planning and building control regulations and failure to remedy the breach.
Last modified 22 Apr 2026
Real estate sale and purchase transactions are by law subject to taxation. The applicable taxes are the following:
Tax on gains from disposal of property is based on gains or profits from the sale of property and is payable by the seller. Under sections 33 – 46 of the Nigeria Tax Act 2025 (NTA), which consolidates the former capital gains tax regime, the tax treatment now depends on the status of the seller. For individuals, gains from disposal of land or buildings are taxed under the Personal Income Tax framework at progressive rates from 0–25%. For companies, gains arising from the disposal of real estate are taxed at 30%, aligned with the Companies Income Tax rate. Gains are calculated based on the actual profit realised, after deducting acquisition costs, improvement expenses, and costs of disposal, in line with the computation rules under the new Act.
Stamp duty is payable on the instrument effecting the transfer of an interest in land. Stamp duties are imposed under Part I of the NTA(Section 124) on instruments executed in Nigeria or relating to property situated in Nigeria. Such instruments must be stamped within 30 days of execution in accordance with Section 126(1). The NTA now recognises electronic stamping and digital denotation of duties (Section 125(1)). Importantly, Section 126(2) expressly provides that the transferee (buyer) of an interest in real property is responsible for payment of the stamp duty.
Stamp duty is typically assessed as a percentage of the value of the property in accordance with the applicable schedule and administrative practice of the relevant tax authority.
Consent and registration fees.
By law, transfers of real estate must be with the consent of the State Governor to be valid. The law also provides that transfer of real estate interests for terms that are above three years should be registered. The different states have different rates for consent fees and registration fees. The rates applicable in Lagos State are 1.5% and 0.5% respectively for consent and registration fees.
Tax relief may still be available in limited circumstances, such as certain group restructurings or qualifying transactions under specific legislation, provided the statutory conditions (including holding periods) are satisfied. Furthermore, the Nigeria Startup Act 2022 provides that tax on gains will not be charged on gains that accrue from the disposal of assets (including shares and land) by investors (angel investor, venture capitalist, private equity fund, accelerators or incubators) with respect to a labelled startup under the Startup Act, provided the assets have been held in Nigeria for a minimum of 24 months.
VAT on Real Estate Transactions
VAT is imposed under Section 144 of the NTA (Section 144) on taxable supplies, subject to the exemptions listed in Part IV of Chapter Eight (Section 186). VAT is charged at 7.5% on taxable supplies (Section 146). However, the law makes important distinctions for real estate: The sale or transfer of land or buildings, including interests in land or buildings, is exempt from VAT under Section 186(1)(l). The sale or lease of residential accommodation is therefore not subject to VAT. VAT will, however, apply to related taxable services connected with real estate, including:
These are treated as taxable supplies of services under Section 146(b) and are subject to VAT at 7.5%.
Last modified 22 Apr 2026
The NTA has introduced capital gains tax on indirect transfers of shares in Nigerian companies. There is also a tax exemption threshold for the sale of shares in Nigerian companies, and this has been increased from N100 million to N150 million in any 12 consecutive months provided that the gains do not exceed N10 million. Furthermore, all documents relating to the transfer of stocks and shares are exempt from the payment of stamp duties under Section 185(h) of the NTA. In practice, only a nominal administrative stamping may be carried out where required.
It is also noteworthy that securities are exempt from VAT. The exemption for “money or securities including interest in money or securities” is provided under Section 186(1)(m) of the NTA. Accordingly, VAT does not apply to the purchase price paid for shares. However, professional fees incurred in connection with the transaction (such as legal, financial, and advisory services) remain subject to VAT at 7.5%. In practice, the seller bears the tax on any gains arising from the disposal of the shares, while the buyer typically bears its own transaction and advisory costs.
Last modified 22 Apr 2026
Which taxes are relevant/which transaction costs will be incurred when buying real estate via the shares in the owning company (share deal) and how are the transaction costs shared between the buyer and seller?
The NTA has introduced capital gains tax on indirect transfers of shares in Nigerian companies. There is also a tax exemption threshold for the sale of shares in Nigerian companies, and this has been increased from N100 million to N150 million in any 12 consecutive months provided that the gains do not exceed N10 million. Furthermore, all documents relating to the transfer of stocks and shares are exempt from the payment of stamp duties under Section 185(h) of the NTA. In practice, only a nominal administrative stamping may be carried out where required.
It is also noteworthy that securities are exempt from VAT. The exemption for “money or securities including interest in money or securities” is provided under Section 186(1)(m) of the NTA. Accordingly, VAT does not apply to the purchase price paid for shares. However, professional fees incurred in connection with the transaction (such as legal, financial, and advisory services) remain subject to VAT at 7.5%. In practice, the seller bears the tax on any gains arising from the disposal of the shares, while the buyer typically bears its own transaction and advisory costs.
Last modified 22 Apr 2026