EXAMINATION OF THE CHALLENGES OF PROPERTY RATING ADMINISTRATION IN NIGERIA
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EXAMINATION OF THE CHALLENGES OF PROPERTY RATING ADMINISTRATION IN NIGERIA
ABSTRACT
Property rating administration has long been a concern in Nigeria, as Estate Evaluators, landlords, and even renters encounter shortcomings in the country’s property legislation.
This study attempts to discuss these difficulties by highlighting potential approaches for the government and public corporations to help end such administrations that are unfavourable to the populace, particularly those in Abuja Municipal.
CHAPTER ONE INTRODUCTION
Nigeria’s expansion into more states in 1976 resulted in new metropolitan centres, whose fast growth raised the need to fund the supply of public utilities. Real estate taxation is an important source of financing. Property tax reform is one of the solutions recommended for increasing revenue to meet the financial needs of cities in developing countries.
Property grading is used in Nigeria at the local government level to generate cash for public purposes. Rates are charged not on the nation as a whole, but on a specific location judged ripe for rate imposition and with parliament’s approval. This permission is not granted on every occasion of rate collecting. The power is broad, granted by statute without limitation and for all periods.
Because of the overall lack of interest among property ratepayers and the reluctance of some assessment authorities to divulge information, property rate administration is frequently shrouded in mystery.
This is based on the fact that the value of each taxpayer’s property is vital to property tax (rate) administration, ensuring that each taxpayer bears a fair percentage of the overall tax levy. Property owners are entitled to know the approximate fraction of estimated market value utilised for tax (rating) assessment reasons.
If the local government is to survive and remain successful as the third tier of government, it will undoubtedly require some local money. Property rating is the most obvious source of such revenue.
Property rating not only influences development but is also an important source of money for local governments to cover the costs of services such as parks, burial sites, marriage, death, and birth registrations.
It is important to note that rate is a type of tax, so the terms “property rate” and “property tax” are interchangeable. There is a slight difference between rate and tax, aside from the fact that rate is a type of tax.
In rating, the amount of revenue required by a rating authority is first determined and then distributed among rate payers according to a pre-determined standard, whereas in other types of tax, the exact amount to be generated at the time of imposition is unknown.
Background of the Study
Based on research and empirical data on property rating in general, and in Abuja in particular, one can see a gold mine with proper handling waiting to be exploited. As such, the purpose of this paper is to examine the administration of property rating in the state, how well informed the rate payers are, their attitudes, system improvement, how well the system has been paying off, and, of course, a critical evaluation of the system.
The purpose of this paper is to investigate and identify the sources of local government finance, its problems, property assessment methods as outlined in some rating laws/Edicts, the impact of the rent control edict on property assessment
property rating prospects, and make recommendations not only on how to expand the local government financial base with a focus on the property rating system, but also on how to best implement the rating in the country. The goal also includes the possibility of site value rating as a technique of increasing local government revenue.
Statement of the Problem
The local government reform law delegated the function of rate collecting to local governments. The valuation unit in Abuja was staffed by civil employees.
The unit organised the tenement rating and generated a valuation list, which was then delivered to the rating authority to serve demand notifications and collect tenement rates.
Collection is one of the most serious rating issues faced by most rating agencies. The inadequate or ineffective administration has led to a high rate of default.
For example, in 2013/15, the entire northern part of Abuja got 21% of the expected rate income. Some rating agencies are now operating on a commission basis.
In addition, the majority of Abuja property owners are illiterate and unaware of their legal rights. Most of them don’t understand why they should pay property taxes at all. Adding to the ugliness of the situation is the ambiguity created by the assessors (valuation officers) in their notice to property owners detailing the assessed worth thereof.
They just display the assessed annual value without indicating the actual rate due. When most landlords read this, they just turn deaf ears and refuse to pay, mistaking the annual value for the rate payable value.
They are only made aware of this premise through litigation, which is not in the best interests of the local government, due to the expense and time involved.
Another factor is how to balance the rating burden of local property owners with the value of government services. The topic of how to ameliorate the current terrible situation while undermining rural development initiatives through effective property rating revenue administration is implicit in this issue.
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