TENANCY LAWS, MULTIPLE TAXATION AND RESIDENTIAL HOUSE RENTS IN LAGOS

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Lagos State can be described as the Nigeria’s commercial capital, is the country’s most active and most expensive rental market where tenants at its highbrow areas pay expensively for residential apartment while similar apartments in the low-mid income areas go for amount. Apart from high demand and low supply, there are other factors responsible for this high rent and, according to Akinlade (2014), the Lagos Tenancy Law and multiple taxation are driving up house rents in Lagos. Recognizing that Lagos is home to over 21 million people, with housing posing a major challenge to the huge population, the state government in August 2011 enacted the Tenancy Law which prescribes one year rent for a new tenant and six months for a sitting tenant.

Akinlade (2014) explained that the single year rent payment law has discouraged investment in homes for rent and has pushed rent to new level, adding that, presently, landlords collect two years’ rent for one year in many locations in Lagos.He explained further that developers, through multiple taxation, were made to pay for land, planning and approval, environment, council and taxes.Access to land through government allocation is a battleground for money bags in Lagos. Planning approval takes forever, yet the government says it will take one to two months.

The Federal Government’s housing policies has not contributed enough for developers in that access to credit from banks was near-impossible for developers and developers that are lucky to receive loan offers must find over 150 percent security for the bank to hold; 25 percent interest rate on bank loans which is a killer for any developer’s business plan (Collins, 2003).

Other reasons for the high rent to include sale of Federal Government’s land in Lagos, high exchange rate to import building material, highly priced local building material, high fuel costs showing itself through transportation costs and generators,  highlabour costs, and inadequate design to maximize land space.

Lagos has seen 30 years of mass housing gap, because since after Lateef Jakande governed Lagos from 1979 to 1983, there has been no mass housing for rent.Jakande was the last governor of the state that successfully implemented and delivered mass housing policies for rent.  For 30 years, successive governments ignored this need of Lagos residents. Jakande also commissioned a report on homes shortage in Nigeria, as at 2010, estimated at 16 million and projected to reach 20 million by 2020.

According to Affe (2008), it is fair to the citizens that government discharge its responsibilities to the people and give meaningful life to the citizens. This underscores the point why Land Use Charge was introduced by Lagos State Government to raise revenue for maintaining existing infrastructure and provide new ones. It is in line with this that the researcher is examining the effect of tenancy law and multiple taxation of residential house rent in Lagos State.

1.2   STATEMENT OF THE PROBLEM      

Lagos State is steadily emerging a multi-nuclei metropolis giving rise to a number of real estate submarkets. Notwithstanding, residential house rent has been abnormally high especially in thenormally adjudged as more juicy in some neighborhoods such as Ikoyi, Victoria Island, Lekki-axis, Ikeja, Apapa, IsaleEko and AmuwoOdofin. However, researchers are of the opinion that the skyrocketed residential house rent in Lagos State is occasioned by several factors including the tenancy law introduced by the Lagos State government and multiple taxation. This study is examining the effect of tenancy law and multiple taxation on residential house rent in Lagos State.

1.3   OBJECTIVES OF THE STUDY

The following are the objectives of this study:

1. To examine the effect of tenancy law on residential house rent in Lagos State.
2. To examine the effect of multiple taxation on residential house rent in Lagos State.
3. To identify other factors that determines residential house rent in Lagos State.

1.4   RESEARCH QUESTIONS

1. What are the effects of tenancy law on residential house rent in Lagos State?
2. What are the effects of multiple taxation on residential house rent in Lagos State?
3. What are the factors that determine residential house rent in Lagos State?

1.5   HYPOTHESIS

HO: Tenancy law and multiple taxation does not influence residential house rent in Lagos State.

HA: Tenancy law and multiple taxation does influence residential house rent in Lagos State.

1.6   SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

1. Findings from this study will educate the general public on how tenancy law and multiple taxation has affected residential house rent in Lagos State. It will also be a guide for policy makers and the government of Lagos State on how to checkmate the issue related to individuals or corporate body paying two or more types of tax at the same time.
2. This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic

1.7   SCOPE/LIMITATIONS OF THE STUDY

This study will cover the tenancy law of lagos state and all the issues of multiple taxation with a view of identifying their influence of residential house rent.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.