Foreign Investors in Lagos Real Estate: Property Purchase and Tax Guide
Introduction
Lagos is Africa’s most dynamic commercial city—an urban engine room where population growth, infrastructure expansion, and relentless enterprise translate into resilient demand for land and housing. For foreign investors and Nigerians in the diaspora, Lagos real estate is not merely an asset class; it is a strategic foothold in a market that blends liquidity with long-run capital appreciation, steady rental yields, and a deep secondary market. Yet, Lagos is also a legal jurisdiction with its own documentary culture, governor’s consent regime, and tax architecture. Successful investors do not improvise; they plan, document, and perfect their interests with meticulous care.
This guide is written in a practical, boardroom-ready style by a senior commercial/property lawyer who has supervised transactions for local and foreign clients across Lagos and Ogun corridors. It distills what matters: the rules, the process, the taxes, the documentation, the due-diligence traps, and the risk controls that preserve value from offer letter to exit. Read it carefully, share it with your advisors, and use it as a working manual before you commit funds.
Call to Action: If you are a foreign investor or a Nigerian in the diaspora planning to acquire, hold, develop, finance, or dispose of property in Lagos, engage our team at Chaman Law Firm for a full-service brief—from due diligence and title perfection to tax structuring and exit planning. Call/WhatsApp: +234 [your primary line], Email: chamanlawfirm@gmail.com, Office: 115, Obafemi Awolowo Way, Allen Junction, Beside Lagos Airport Hotel, Ikeja, Lagos. We act quickly, precisely, and discreetly.
Understanding the Legal Landscape: Ownership, Title and Consent
The Land Use Framework
In Nigeria, land is vested in the Governor of each State for the use and common benefit of all Nigerians. In Lagos, you do not “own” land in the absolute freehold sense; you hold a statutory right of occupancy that can be granted, assigned, or sub-leased with the Governor’s Consent. Practically, this means that a transfer of an interest in land in Lagos is not fully perfected until the requisite consent, stamping, and registration formalities are completed.
Foreign Ownership
Foreign nationals and foreign-owned entities can acquire interests in Lagos real estate subject to the same perfection requirements as citizens. The prudent route for many investors is to purchase through a Nigerian special purpose vehicle (SPV)—a company incorporated under the Companies and Allied Matters Act—because an SPV simplifies governance, financing, repatriation documentation, and eventual exit (e.g., by share sale rather than asset sale). Nigerians in the diaspora may purchase in personal names or through SPVs; the governance and tax consequences differ and should be planned deliberately.
Recognized Title Instruments
Key instruments include: Certificate of Occupancy (C of O); Governor’s Consent; Deed of Assignment (transfer of title); Deed of Sub-Lease (where the seller holds a leasehold); Deed of Mortgage (for financed purchases); and, where relevant, Deed of Rectification or Deed of Variation. Titles may also rest on excision and gazette status in newly developing districts; such titles demand additional verification to ensure the land block is properly excised and free of acquisition.
The Three-Pillar Perfection Process
Every credible Lagos transaction passes three pillars: (1) Governor’s Consent to the assignment or sub-lease; (2) Stamp Duties on the instrument; and (3) Registration at the Land Registry to put the world on notice and preserve priority. Failing to perfect leaves your interest vulnerable, especially against subsequent registered interests or in a dispute scenario.
A Deal-Ready Due Diligence Framework
Top-Tier Searches
Conduct searches at the Lagos State Lands Registry for the root of title and encumbrances; at the Corporate Affairs Commission (if the seller is a company) for capacity, directors, and debentures that might charge the property; and—if a mortgage exists—obtain evidence of discharge or lender consent. In estates carved from government schemes, verify allocation letters, payment receipts, and the scheme’s gazette status. For informal lands, commission a credible survey, chart it at the Office of the Surveyor-General, and confirm whether the land falls within government acquisition, committed areas, or free-holdable zones.
Survey and Charting
Never rely on hand-drawn site plans. Engage a licensed surveyor to produce a georeferenced survey and to chart the parcel against state records. Charting is the early-warning radar that tells you whether you are stepping into acquisition land, a road alignment, or utility corridor.
Physical and Community Enquiries
Inspect the site personally or through trusted counsel. Interview boundary owners and the estate management (if any). In areas with traditional landholding, confirm that you are dealing with the proper family representatives (heads of family and principal members) and obtain a well-drafted Deed with valid customary signatures and statutory perfection thereafter. Guard against “omo-onile” (land tout) risks by insisting on centralized payment to a regulated escrow and a clear vendor authority chain.
Developer Verification
If purchasing off-plan or within a private estate, verify the developer’s approvals: layout approval, building plan approvals (for constructed units), environmental permits, and evidence of land allocation or head title. Read the estate scheme documents for service charge regimes, usage restrictions, and common area rules. Confirm that the estate is not under litigation and that service infrastructure is properly provisioned.
Transaction Structuring for Foreign Investors
SPV vs Personal Purchase
An SPV can improve confidentiality, help with bank financing, and streamline exit via share transfer (which may be faster than asset re-conveyance). It also ring-fences liabilities. However, SPVs require annual filings and corporate governance. Personal holding is simpler administratively but can complicate financing and estate planning. For family offices and institutional buyers, a layered holding (HoldCo → SPV → Asset) is common.
Escrow, FX, and Capital Importation
Price is typically agreed in naira, but where foreign currency is agreed, structure the inflow through an authorized dealer bank to obtain a Certificate of Capital Importation (CCI). The CCI is vital for repatriation of capital and allowable returns. Use an escrow agreement (bank or solicitor’s client account) that releases funds only upon satisfaction of defined deliverables—executed deed, possession, and evidence of consent application at a minimum.
Timeline and Critical Path
A practical acquisition timeline runs through: offer and acceptance; deposit into escrow; due diligence (legal, survey, corporate); contract exchange; completion with execution of deeds; immediate stamping; filing for consent; and registration. Build conservative buffers into your timeline. Do not take possession or commence construction until your counsel greenlights risk posture.
The Tax Architecture: What You Will Encounter
Overview
Property transactions in Lagos engage federal and state tax/levy regimes. The key heads are (a) Stamp Duties on instruments; (b) Perfection fees at the state (including consent and registration fees); (c) Capital Gains Tax on disposals; (d) Withholding Tax on rents and certain service payments; (e) Value Added Tax (VAT) on specified services (e.g., agency, legal, construction inputs); and (f) Land Use Charge for ongoing holding.
Stamp Duties
Instrumental stamp duties are payable when instruments are executed. The rate is ad valorem (value-based) for conveyances/assignments. Because schedules and administrative practices may be revised periodically, treat published percentages as subject to official circulars. Your solicitor will compute stamping at completion and file within statutory windows to avoid penalties.
Perfection and Statutory Fees
Perfection comprises Governor’s Consent, registration, and related processing fees. States periodically adjust these; therefore, rely on an up-to-date computation from your transaction counsel. A model completion statement should break out the heads separately and distinguish statutory fees from professional fees.
Capital Gains Tax (CGT)
On disposal of real property, CGT applies to the chargeable gain (sale price less allowable costs such as acquisition cost, improvement, professional fees, and statutory charges). Plan for CGT at exit; good record-keeping from day one (surveys, receipts, perfection costs, contractor invoices) materially reduces your assessed gain.
Withholding Tax (WHT) on Rents
When you let property, tenants (particularly corporate tenants) are required to deduct withholding tax from rent and remit to the relevant authority with credit to the landlord. Rates and administrative practices vary by category (property rent vs service), so obtain current guidance and ensure all remittances are receipted to preserve your credit position.
VAT on Services
While the rent of residential property is generally not VATable, various professional and agency services (legal, agency, facility management, construction inputs, furnishing, and repairs) fall within VAT where applicable. Confirm VAT treatment at the engagement stage and ensure invoices reflect proper tax lines.
Land Use Charge (LUC)
LUC is an annual charge payable to Lagos State on property based on assessed value and usage categories. It consolidates certain previous local charges into one. Ensure the property is properly enumerated, billed, and paid each year to avoid penalties and distress measures. Investors adopting a build-to-lease strategy should model LUC alongside insurance, service charge baselines, and routine capex to produce an honest net-yield forecast.
Building a Tax-Efficient Position—Lawful, Defensible, and Document-Led
Pre-Acquisition
Select the holding vehicle (personal vs SPV) with tax and repatriation in view. Where capital is inbound, process through an authorized dealer bank to secure a CCI. Negotiate that the seller bears its own taxes, while you bear your own, and reflect allocations clearly in the completion statement. Avoid side letters that contradict deeds.
During Holding
Keep immaculate records: rent ledgers, WHT credit notes, VAT invoices, LUC receipts, insurance policies, service charge accounts, repair and improvement invoices. These become the evidence base to defend your tax position and reduce CGT at exit.
At Exit
Before you list the property or agree a heads of terms, build an exit tax memo. It should model CGT under different price scenarios, account for allowable deductions, and map the documentary bundle needed to support your computation. If your buyer is foreign and wants a share acquisition (SPV transfer), weigh any share transfer duties and regulatory filings against the speed advantage.
Compliance Calendar and Evidence Trail
Create a compliance calendar capturing: LUC due dates; WHT remittance windows; VAT returns (if registered); annual filings for SPVs; and insurance renewals. Preserve stamped, registered copies of your deeds. Maintain board minutes (if SPV) approving key actions and contracts. In a Lagos audit, paper defeats speculation.
Risk Controls: How Experienced Counsel De-Risk Lagos Property
Title Integrity
Insist on chains of title that are consistent, legible, and contemporaneously stamped/registered. Be suspicious of “lost C of O” claims absent a police report and a Gazette notice of loss. Confirm signatures of family representatives are valid and identify principal members in customary deals.
Valuation Discipline
Obtain an independent valuation for financing, but also run a legal risk valuation: litigation risk, consent posture, tenure of possession, estate governance quality, and infrastructure delivery. A 5% discount on price is meaningless if risk factors can wipe out capital through a defective title.
Construction Governance
If you are building, execute a robust building contract with clear scope, milestones, retention, defect liability period, and insurance obligations. Confirm architect and engineer registrations. Obtain and display building plan approvals, pay necessary levies, and comply with site safety standards. A stop-work order can destroy timelines and budgets.
Insurance
Insure the asset: fire and special perils, builder’s all-risk (if constructing), public liability for common areas, and rent loss insurance for prime leases. In Lagos’ dense environment, third-party liability cover is not optional.
Dispute Resolution and Enforcement
Draft your agreements with tiered dispute resolution—negotiation, mediation (Lagos Multi-Door Courthouse), and finally litigation or arbitration. Choose governing law (Nigerian law for real property) and, where appropriate, arbitration for commercial adjuncts (e.g., construction contracts). Ensure notices clauses reflect practical service addresses and email efficacy.
Acquisition Playbooks by Asset Type
Bare Land
Priority is survey, charting, and encumbrance search. Budget for perimeter fencing to assert possession after completion. Establish a development timeline that matches local planning controls. Avoid speculative hoarding without at least minimal physical assertion of possession documented by photographs and site logs.
Off-Plan Apartments
Demand: (1) evidence of the developer’s root title and consents; (2) regulatory approvals; (3) escrowed progress-linked payment plan; (4) a delivery schedule with liquidated damages for delay; and (5) defect liability regime and warranty. Verify that service charge budgets are realistic and that meters (water/power) and car parks are clearly allocated.
Completed Homes in Private Estates
Scrutinize the estate’s governance framework: homeowners’ association constitution, service provider contracts, and enforceability of service charges. Confirm there are no arrears that will pass to you. Obtain letters of non-indebtedness from the estate management as a completion deliverable.
Commercial Assets
For offices, retail boxes, and warehouses, review planning approvals for use, fire compliance, parking ratios, loading docks and turning circles (for logistics), and environmental permits where applicable. In prime districts, covenant strength of tenants is king: analyze financials, lease terms, break options, and rent escalation formulas.
Financing and Security
Bank Financing
Local lenders will require valuation, evidence of perfected title, and assignment of insurances. Expect a legal mortgage with an all-monies clause, negative pledge, assignment of rental income, and step-in rights to service contracts. If the borrower is an SPV, parent guarantees may be requested. Maintain covenant compliance and reporting—breach of insurance or tax can trigger default.
Private Capital and JV Structures
Where you partner with landowners or developers, use clear Joint Venture Agreements distinguishing land value as equity, construction equity, profit-sharing formulas, waterfall distributions, decision thresholds, and dispute resolution channels. Register caution or caveat to protect JV rights on title where appropriate.
Repatriation and Exit Pathways
Repatriating Capital
Your CCI is the passport for repatriation. Maintain bank advices and audited financial statements (if SPV) to support repatriation requests. Work through authorized dealer banks and comply with documentation requests promptly.
Exit Options
Asset sale, SPV share sale, or refinance-and-hold with partial equity release. Each has different tax and timeline consequences. In strong cycles, share sale can be efficient; in quiet cycles, an orderly asset sale with extended completion or vendor financing may clear.
Compliance Red Flags That Kill Deals
Unregistered Deeds
Unsigned or unstamped instruments are not merely weak—they may be inadmissible to prove title transfers. Cure before closing.
Multiple Surveys
When two surveys disagree materially, stop. Commission a reconciliation survey and resolve overlaps before you deploy capital.
Litigation Lis Pendens
If there is an existing suit over the land, seek legal advice immediately. Transactions pendente lite (during litigation) can be voidable and toxic.
Community Levies Without Receipts
Never pay “community development” or “road” levies informally. If such payments are legitimately required in that locality, insist on official receipts, sign-offs, and inclusion in completion statements.
Governance and Estate Planning for Foreign Owners
Corporate Governance
Adopt a lean but real governance posture: board approvals for acquisitions, bank mandates, conflict-of-interest registers, and contract registers. Good governance is a value premium when exiting to institutional capital.
Estate Planning
For individuals, pair your acquisition with a Will or a Living Trust to avoid probate bottlenecks and preserve control. For family offices, consider a holding company with clear shareholder agreements and reserved matters to control asset decisions across generations.
Practical Completion Checklist (Use This in Every Deal)
Offer letter stating price, deposit, timeline, deliverables, and allocation of taxes/fees.
Vendor’s title bundle: root of title, survey plan, receipts, and consents.
Search reports: Lands Registry, CAC (if company vendor), litigation search where indicated.
Fresh survey and charting report.
Executed Deed of Assignment/Sub-Lease with completion statement attached.
Evidence of stamp duty payment (filed promptly).
Application for Governor’s Consent lodged with acknowledgment.
Registration filing receipts and follow-up diary entries.
Handover: keys, access cards, estate clearance and non-indebtedness letters.
Insurance cover note and policy schedule effective at possession.
Post-completion: compliance calendar for LUC, WHT/VAT, and filings.
Frequently Asked Questions (Strategic Answers)
Can a foreigner hold Lagos property directly?
Yes. Foreign nationals and foreign-owned entities may hold interests subject to the same perfection and compliance requirements. Many choose an SPV for governance and exit efficiency.
Should I buy in my name or through a company?
It depends on financing, confidentiality, and exit plans. A company can simplify bankability and share-sale exits, but introduces annual compliance. Personal holding is simpler but may complicate structured exits and succession.
How long does perfection take?
Timelines vary with file completeness and administrative load. Build buffers and start immediately after execution. Use counsel familiar with the registry’s current workflow.
What are the main taxes and charges?
Stamp duties (on the instrument), state perfection fees (consent and registration), annual Land Use Charge, and—on exit—Capital Gains Tax on the gain. For rentals, expect WHT deductions by tenants and VAT on certain service fees. Rates and procedures are subject to periodic administrative updates; always obtain a current computation.
Is residential rent VATable?
Generally residential rent is not, but professional, agency, and facility services are typically VATable. Confirm the current position with your tax advisor at engagement.
How do I protect against “omo-onile” risks?
Centralize payments via escrow, verify the authority chain, obtain proper execution by heads of family and principal members (where applicable), perfect your title promptly, and fence/secure possession after completion.
What documents must I see before paying?
Root of title, survey plan, search results, consent history, estate service records (if applicable), and corporate authorizations (if a company is selling). Never advance beyond a modest refundable deposit without completed searches.
What is the smartest exit?
In buoyant markets, a share sale of the SPV can be efficient; in slower markets, a well-documented asset sale may clear. Model CGT and transaction costs before choosing.
Model Completion Statement (Illustrative Only—Subject to Current Schedules)
Purchase Price: ₦___
Buyer’s Costs:
• Stamp Duty on Deed of Assignment: ₦___
• Governor’s Consent/Perfection Fees (consent, registration, filing): ₦___
• Legal Fees (plus VAT where applicable): ₦___
• Survey/Charting (if new or rectification): ₦___
• Estate Dues/Clearance (if applicable): ₦___
• Insurance (from possession date): ₦___
Total Buyer’s Costs: ₦___
Grand Total Outlay: ₦___
Vendor’s Costs:
• Vendor’s own capital gains tax (if applicable): ₦___
• Any outstanding estate/service dues up to completion: ₦___
Note: The allocation of costs must be reflected expressly in the Deed and/or a side completion statement countersigned by both parties.
Professional Engagement Architecture—How We Manage Your Transaction
Mandate and Scope: We take instructions, define scope (acquire/hold/develop/lease/exit), and align on timelines.
Strategy Memorandum: A short, written transaction map with risk registers and compliance calendar.
Due Diligence: Parallel legal, survey, and corporate searches with written reports to inform go/no-go.
Deal Documentation: Draft/review Heads of Terms, Deed of Assignment/Sub-Lease, escrow, and completion statement.
Completion and Perfection: Supervised execution, immediate stamping, prompt consent application, and registration follow-through.
Compliance and Holding: LUC set-up, tax advisory coordination, insurance, and property management onboarding.
Exit Planning: CGT modeling, data-room preparation, and buyer due-diligence choreography when the time comes.
Final Counsel to the Prudent Investor
Lagos rewards discipline. If you chase “cheap,” you will often buy “dispute.” If you neglect perfection, you will fund litigation rather than growth. If you ignore the tax calendar, you will pay penalties instead of dividends. Conversely, when you run the process properly—due diligence, consent, stamping, registration, evidence-based tax compliance—Lagos property behaves like the world-class asset it is: a store of value that throws rent, appreciates with infrastructure, and speaks the language of institutional capital at exit.
Call to Action
If you are ready to proceed, we will act as your transaction counsel and tax strategist—end-to-end. Engage Chaman Law Firm for due diligence, documentation, perfection, and tax compliance on your Lagos acquisition. We operate with urgency and precision.
