Stamp Duty on Property in Nigeria: Who Pays It, How Much & How to Pay

Stamp duty is one of the transaction costs of buying property in Nigeria that many buyers overlook when budgeting. It is not optional — an unstamped property document cannot be registered or used as evidence in court — which means it must be part of every formal property purchase. This guide explains what stamp duty is, how it is calculated, who pays it, and how the payment process works.

What is stamp duty?

Stamp duty is a tax on legal documents and instruments. Under the Stamp Duties Act (Cap S8 LFN 2004), as amended by the Finance Acts, stamp duty is payable on a range of instruments — from agreements and bonds to property transfer deeds.

For property transactions, the relevant document is typically the Deed of Assignment (the document that transfers ownership from seller to buyer). Stamp duty on a Deed of Assignment is calculated ad valorem — that is, as a percentage of the stated consideration (purchase price).

Which property documents require stamping?

• Deed of Assignment — the primary transfer document; stamp duty is calculated on the consideration
• Mortgage deed — the document creating a mortgage security over a property; stamp duty is calculated on the loan amount
• Lease agreements — for tenancies, stamp duty may apply depending on the lease term and rent
• Power of Attorney — used to authorise someone to act in a property transaction
• Contracts of sale / sale agreements — preliminary agreements prior to completion

How stamp duty is calculated on a property purchase

For a Deed of Assignment (property purchase), stamp duty in Nigeria is calculated as a percentage of the stated purchase price (the consideration in the deed):

• The applicable rate for ad valorem stamp duty on property conveyances is set by the Stamp Duties Act
• The rate applies to the full consideration — so a higher purchase price means higher stamp duty
• The taxing authority (FIRS or State IRS) may assess the consideration and may challenge a stated price they believe is understated relative to market value

Your solicitor will calculate the stamp duty as part of the conveyancing process and inform you of the amount due. Always budget approximately 1.5%–2% of the property value for stamp duty, though exact rates should be confirmed with your solicitor based on current law.

Who is responsible for paying stamp duty?

By law and by convention, stamp duty on a Deed of Assignment is the buyer's responsibility. The buyer is the party who benefits from a properly stamped document — without stamping, the buyer's ownership cannot be registered or enforced in court. For lease agreements, the obligation may be shared or fall on the tenant, depending on negotiation and local practice.

The stamping process

1. Draft the instrument: Your solicitor drafts the Deed of Assignment (or other instrument) with the full details of the transaction including the stated consideration.
2. Assessment: The instrument is submitted to the relevant tax authority for assessment of duty payable. In Lagos, this is typically the Lagos State Inland Revenue Service (LIRS) for state-level instruments, or FIRS for federal instruments.
3. Payment: The assessed stamp duty is paid at a designated bank or through the relevant online payment portal. A payment receipt is obtained.
4. Stamping: The instrument is submitted (physically or through the online system) to be stamped — an official stamp or impression is affixed to the document confirming that duty has been paid and the document is admissible.
5. Registration: The stamped document can now be presented for registration at the State Lands Bureau as part of the title perfection process.

Stamp duty in the context of total transaction costs

Stamp duty is one of several transaction costs when buying property in Nigeria. Budget for all of them:

• Stamp duty — typically 1.5%–2% of property value
• Legal fees (solicitor) — typically 5–10% of property value for full conveyancing
• Governor's Consent fee — 3%+ of property value in Lagos; varies by state
• Registration fee — Lands Bureau registration; a percentage of property value
• Survey and valuation fees — for the survey plan and valuation report
• Estate agent fee — typically 5–10% of annual rent (for rental), or negotiated % for purchase

In Lagos, the total transaction costs on a property purchase (excluding agent fee) can amount to 15–25% of the purchase price in addition to the purchase price itself. Budget for these costs explicitly before committing to a purchase.

Related guides: Governor's Consent Nigeria, How to Register Property Nigeria, Estate Agent Fees Nigeria, Buying a House in Lagos.