ABSTRACT

Property rating administration for long has being a problem in Nigeria, as its faced by Estate Evaluers, landlords and even tenants due to inadequacies that exist in property laws in the country. This research has sort to discus this challenges, as it highlights possible ways the government, public enterprises can help stop such administrations that are not favorable to the masses, especialy those in Abuja municipal.

CHAPTER ONE INTRODUCTION

The creation of more state in Nigeria in 1976 gave rise to new urban centres, the rapid growth of which increased the need to finance the provision of public utilities. One of the major sources of finance is real estate taxation. Property tax reform is one of the alternatives proposed as a means for raising increased revenue to meet the financial needs of cities in less developed countries. Property rating is employed in Nigeria at the local government levels to raise revenues for public purposes. Rates are levied not on the nation as a whole but on a particular locality that is deemed ripe for the imposition of rates and with the consent of parliament. This consent is not given on every occasion of rate collection. The power is general one, given by statute without restriction and for all times.

The general lack of interest on the part of the property ratepayers and the reluctance of some assessment jurisdictions to disclose information, the property rate administration is often surrounded in mystery. This centres on the fact that the core of property tax (rate) administration is the value of each taxpayer’s property, so that each taxpayer will bear fairly his proportional part of the overall tax levy. Property owners have a right to know the approximate, fraction of estimated market value that is being used for tax (rating) assessment purposes.

If the local government have to exist and to viable as the third tier of government they must surely need some local revenue in order stand firmly property rating is the most obvious source of such revenue. Property rating not only helps in influencing development but is also the major source of local government revenue used in defraying the cost of services rendered by local government includes, inter-alia, parks, burial grounds, registration of marriage, death and birth.

It is important to note that rate is a form of tax, hence the use of property rate and property tax is interchangeable, although there is a slight difference between rate and tax, beside that rate is a form of tax, while in rating the amount of revenue required by a rating authority is first decided and then distributed among the rate payers according to a pre-fixed standard in other kind of tax the exact amount to be generated at the time of imposition is unknown.

From investigation and empirical data on property rating in general and in Abuja in particular, one observes a gold mine with proper handling waiting to be exploited as can seen in Abuja, therefore the aim of this paper to examine the administration of property rating in the state, how well informed the rate payers are, their attitudes, improvement in the system, how well the system has been paying off, and of course, a critical appraisal of the system.

The purpose of this paper is to study and identify the sources of local government finance, its problems, methods of property assessment as provided in some rating laws/Edicts, the impact of control of rent edict on property assessment, prospects of property rating and make recommendations not only on how best to expand the local government financial base with particular reference to property rating system but also on how best to implement the rating in the country. The purpose also includes the prospect of site value rating as a means of boosting the local government finance.

The local government reform law gave the function of rate collection to the local authorities. The valuation unit in Abuja  was staffed by civil servants. The unit organized tenement rating and prepared valuation list which were after due procedure sent to the rating authority to serve demand notices and collect tenement rates.

One of the greatest rating problems in most rating authorities is the problem of collection. The weak or ineffective administration has resulted in a high rate of default. For example in 2013/15 the whole of Abuja north 21% of the estimated rate revenue was collected. Some rating authorities are now embarking on a commission basis.

In collation with this, most property owners in Abuja are illiterates and do not know their rights.  Most of them do not know why they should pay property rate at all. Added to this ugly situation is the ambiguity mounted by the assessors (valuation officers) in their notice to the property owners indicating the assessed value thereof. They only show the assessed annual value with out signifying the actual rate payable. When most of landlords see these, they simply deafen their ears, and blatantly refuse to pay, misconstruing the annual value as the rate payable value. They are only brought to attention of this premise by litigation, which is not the best interest of the local government, the cost and time consummations.

Another factor is how to equate the rating burden of the property owners in the locality with the value of services provided by the government activity. Implicit in this problem is the question of how to improve the current deplorable situation and weakening rural development programs via sound administration of property rating revenue.

1.3     OBJECTIVES OF THE STUDY

The main objective of this study is to examine the challenges of property rating  in Nigeria, from the introduction of property rating in the local government is to raise revenue from the source. Revenue, thus generated are utilized by the local government where the tenements/properties are located to provide essential service which the government grants cannot easily take care of.

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