By Temitayo Olayinka

The total estimated value of the real estate market in Nigeria is expected to reach $2.25 trillion in 2025, yet only about 10% of these properties have proper legal titles. It raises the question of why there are many properties and only a few are titled. The truth is today in Nigeria many property transactions occur, and the majority are not captured by the appropriate land bureaus at the national and sub-national governments. A 2020 study revealed that the government is only aware of 4% of property transactions in Nigeria. This is abysmal, and it suggests that the government is losing a lot of revenue it would have earned in the form of taxes on the numerous transactions and capital gains tax (CGT) on real estate investors that have made capital gains.

Nigeria can adopt the process of buying and selling properties that the United Kingdom (UK) operates. In the UK, both the buyers and the sellers of landed properties must appoint solicitors to conduct searches on the properties in question and also carry out the conveyancing process. In other words, the lawyers will help to ensure that ownership title duly transfers from the seller to the buyer. Furthermore, the solicitors are saddled with registering the title deeds with His Majesty Land Registry (HM Land Registry). In addition, the solicitors of the buyers are tasked with collecting the stamp duty tax due from the buyer before the transaction is completed and the exchange occurs for onward payment to His Majesty Revenues and Customs (HMRC). Also, for the purpose of computing and filing capital gains tax by the seller, the completion statement exchanged by the solicitors at the end of the transaction will show the actual selling price and deductible transaction costs that will be used as supporting evidence when filing taxes with the HMRC.

The key proposal here is to make it impossible to consummate a property transaction without involving solicitors—a minimum of one for the buyer and another for the seller. The solicitors will be responsible for ensuring property transfer registration with the appropriate land registry and also remitting due transaction taxes/charges to the tax authorities. There are several benefits derivable from this, and they include a reduction in fraudulent property transactions as the solicitors will do the necessary search on the property and also register the title transfer with the land registry; the land registry database will be up-to-date, hence situations where a registered owner can sell a property to multiple buyers can be avoided; it improves the confidence that creditors have in accepting real estate as collateral; and the revenue generation of governments from property transactions will be greatly increased.

Why anchor the process on solicitors? Solicitors are meant to be people of high integrity that uphold the law. They have a duty to the general public and a duty to ensure professional dignity. Solicitors are registered with the Supreme Court of Nigeria and are members of the Nigerian Bar Association (NBA). This means solicitors are traceable and answerable to these institutions. Furthermore, the Body of Benchers and the Legal Practitioners Disciplinary Committee will help hold every solicitor accountable, as they are empowered to discipline any erring practitioner. In addition, the fact that there will be a minimum of one independent lawyer each representing both sides in a transaction helps improve the integrity and transparency of the process.

Temitayo Olayinka, is a real estate expert and finance expert