EFFECT OF TAXATION POLICY ON PROPERTY MARKET TRANSACTION IN MINNA, NIGER STATE

EFFECT OF TAXATION POLICY ON PROPERTY MARKET TRANSACTION IN MINNA, NIGER STATE

ABSTRACT

Increasing demand for urban and rural infrastructures and dwindling revenue allocations in Nigeria have informed the Niger State Government to promulgate Land Use Charge Law (2001) as a way of increasing internally-generated revenues through property tax. The Law stipulates a formula for assessing the Charge payable on properties in Lagos State, amongst other provisions. The aim of this study is to determine the effect of taxation policy on property market transaction in Minna Niger State which is one of the thematic areas of Vision 20:2020 for Nigeria. A process of inferences was adopted to evaluate the law in addition to questionnaires administered on Estate Surveyors and Valuers within Minna metropolis. The study found that the formula is inappropriate and that high tax and penalties may discourage investment in new housing and maintenance of existing stock. It therefore recommended a review of the Law and in addition suggested an appropriate basis of fair and equitable tax such that the goal of Vision 2020 is realizable.

  

CHAPTER ONE

1.0                                     INTRODUCTION

1. Background of the Study

The housing literally means building or shelters in which people live work dwell etc and to nation as a critical component in social and economic fabric [Kabir and Bustani, 2009]. It represents one of the most basic human needs. As a unit of environment, it has a profound influence on the health, efficiency, Social behavior, satisfaction and general welfare of the community. It is a priority for the attainment of living standard and it is important to both rural and urban areas.

These attribute make demand for housing to know to bound as population growth and urbanization are increasing very rapidly and the gap between housing need and supply becomes widen. Cultural factors such as preferences and value or social Status, taste and financial resources, also influence a home physical characteristic.

In developing countries, poor housing delivery has been attributed to inadequate mechanism and system for land allocation, funding mortgage institutions and infrastructure. Also the government policies dictate the nature and manner of the market and how activities are run in the body polity. Despite this significance of housing adequate supply has remained a mirage to all carder of the society in Nigeria. The situation is very particular to most developing countries where population is growing at exponential rate and rapid urbanization becoming a num, and discrepancy in housing need and supply is high.

According to Kabir and Bastani IBID, in a developing country like Nigeria, the housing Problem basically relates to quantitative and qualitative inadequacies on the supply side various government policies in the past have been formulated towards overcoming the huge shortage through several housing reform programmers and how the property market operates. Despite these past efforts housing continuous to be a mirage to ordinary Nigerian.

Currently there are various mass housing delivering programs such as the affordable housing scheme that utilize the republic, private partnership effort and several private finance initiative models could only provide for about 3% of the required stock. This suggests the need for a holistic solution in approaching the problem.

While the quality of the existing stock that do not meet the minimum quality requirement. Thus this study is necessitated to point out the property market operation in Minna with the view of finding a lasting solution to the problem of housing and give directions for other areas in Nigeria.

1.2     Statement of the Problem

According to [Kabir and Bustani 2009] the housing problem basically relates to quantitative and qualitative inadequacies. On the supply side, various government policies in the past have been formulated towards overcoming the various mass having delivery programs such as the affordable housing scheme that utilize the public private partnership effort and several private finance initiative models could only provide for about 3% of the required stock.

A recent study of the housing situation in Nigeria put existing housing stock at 23 per 1000 inhabitant.

The housing deficit is put at 15 million houses [Mabagunje 2002] while 12 trillion will be required to finance the deficit, this is about 4time the annual national budget of Nigeria. Home price and rents on the other hand, have grown ahead of general inflation making matters worse the composition of homes for sale and rent on the market has been inexorably shifting towards very expensive homes.

Also Kabir and Bustani ibid state that current scheme include a “site & Service” that provides low-income beneficiaries with serviced plots including tenure Security and help to build their own houses and the second approach helped house-owners in existing squatter area obtain tenure to their land and to improve their dwelling. In spite of the fact that they may help to improve tenure security, these initiate target population low-income earners usually does not benefit from them. Hence, this study is necessitated to asses the effect of taxation policies on the property market operation in Minna, Niger state with the view of point out the impact of these policies in the area to serve as a guideline blue-print and working document for other areas.

1.3     Aim and Objectives of the Study

The aim of this study is to assess the effect of taxation policies on the property market transaction in Minna.

Objectives

To achieve the aim the following objective are set:

1        To identify the various taxation policies of government that impinges on the property market in Minna

2.       To assess the impact of these policies on the property market.

3.       To examine the issue and changes of these policies as they apply to the transaction of the property market in area.

1.4     Research Questions

This research therefore is intended to answer the following questions;

1. What are the various Taxation policies of government that impinges on property market in Minna?
2. What are the impact of these policies on property market?
3. What are the issues and changes of these policies as they apply to the transaction of the property market in the area?.

1.5     Hypothesis

Ho:    Government tax policies has negative effect on property market in Minna

Hi:     Government tax policies has no negative effect on property market in Minna

1.6     Significance of the Study

The potential finding of this study will be beneficial in the following ways

• To the estate surveyors on the need to be sophisticated in their approach in property market transaction. This will largely help to reduce the image and credibility of the profession and also reliability of their report before their highly estimated users.
• It will fill gap in literature as there are death information in this respect of research especially in the study area
• Users of property [financiers and developers] will be properly and accurately guided.

1.7     Scope of the Study

The scope of this study is limited to effect of taxation policies on property market transaction in Minna metropolis, Niger State.

1.8     Operational Definition of Terms

Real property: [encyclopedia] all land, structures, firm attached and integrated equipment [such as light, Fixtures or a well pump], anything growing on the land, and all “interests” in the property which may be the right to future ownership [reminder], right to occupy for a period of time

[tenancy or life estate]

the right to drill for oil, the high to get the property back [a version] if its  no longer used for its current purpose

[such as use for a hospital, school or city hall]

, use of air space

[condominium]

or an easement across another’s property.

Market: is one of the many varieties of system institutions, procedures, social relations and infrastructures whereby parties engage in exchange goods and services by banter, most markets rely on sellers offering their goods or services

[including labor]

in exchange for money from layers. It can be said that a market is the process by which the prices of goods and services are established.

Taxation: Taxation refers to the act of a taxing authority actually levying tax. Taxation as a term applies to all types of taxes, from income to gift to estate taxes. It is usually referred to as an act; any revenue collected is usually called “taxes”. Taxation is one of the primary powers of government over the people. 

1.9     Historical Background of the Case Study

Minna is a city (estimated population 304,113 in 2007) in west-central Nigeria. It is the capital of Niger State, one of Nigeria’s 36 federal states. It consists of 2 major ethnic groups: the Nupe and the Gbagyi

Archaeological evidence suggests settlement in the area dates back to about 47,000-37,000 years ago. Muslim culture filtered into Minna by way of the ancient Saharan trade routes and the city contains many mosques and Muslim organizations. Christianity is a major population in Nigerian Niger State, where Sharia is valid. Minna has a Living Faith Church, a Grace Baptist Church, Nupe Kalvari Churches, Anglican Churches, ECWA Churches, Baptist Churches, Victory Christian Church, The Apostolic Church and many others too numerous to mention. Minna is the home of Nigeria’s former military President Gen. Ibrahim B. Babangida, and of former Head of State Gen. Abdulsalami Abubakar. Dr. Mu`azu Aliyu Babangida resides in Minna as the present governor of Niger State. He served a term of four years (2007-2011), and is currently serving another term of four years (2011-2015) – his last term since the political system does not allow elected governor to serve more than two terms

Cotton, guinea corn, and ginger are the main agricultural products of the city. Yam is also extensively cultivated throughout the city. The economy also supports cattle trading, brewing, shea nut processing and gold mining. [1] Traditional industries and crafts in Minna include leather work and metalworking

Minna is connected to neighboring cities by road. Abuja, the capital of the country, is only 150 km away. Minna is also connected by railroad to both Kano in the north and Ibadan and Lagos in the south which is also boarder by Illori city. The city is served by Minna Airport.

Minna is the seat of the Federal University of Technology Minna, that has campuses in Gidan-Kwano and Bosso, the Niger State College of Education, and the Police Secondary School.

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