What Costs Are Involved in Buying Land In Nigeria?

Buying land can be an exciting journey, but many people focus only on the purchase price and overlook the additional costs that come with it. These extra costs can sometimes catch buyers by surprise, especially first-timers. In this article, we will break down the major costs involved in buying land, including the hidden ones. We’ll also explain which of these costs may be included in the land price when you buy from a real estate firm and which ones you may need to pay separately. Let’s get started.

1. The Purchase Price

This is the main cost of the land itself. It’s the amount advertised by the seller or real estate company. However, this is just the beginning of your financial commitment.

2. What Are Hidden Charges?

Often, I get this question from investors during inquiries about properties:

“What are the hidden charges aside from the amount for the land?”

Dear Intending Investors,

There is nothing like hidden charges; it is called Statutory Fees.

Statutory Fees/Charges are required by law/government during the transaction of land or property. When a land moves from one owner to another, the new owner is required to pay the following statutory charges:

3. Deed of Assignment

A Deed of Assignment is an agreement between the seller of a land or property and a buyer, showing evidence that the seller has transferred all rights, title, interest, and ownership of the land to the buyer.

The Deed of Assignment acts as the main document between the buyer and seller to show proof of ownership in favor of the buyer. It also gives a specific description of the property included in the transfer of ownership and spells out the date when ownership transfers from one owner to the other.

This document is drawn up by a lawyer and signed by both the seller and the buyer.

4. Survey Fees

A Survey Plan is a document that measures the boundary of a parcel of land to provide an accurate measurement and description of the land.

The person who draws up a Survey Plan is known as a Surveyor, and they are regulated by the office of the Surveyor General in the state. Survey fees vary from one local government to another, and the money paid for the survey goes to the government.

5. Development Fees

Development Fees are charges that developers ask of people who buy into an estate to provide infrastructure and amenities for the estate. The amount varies from developer to developer, depending on the planned infrastructure and amenities.

Here’s What Statutory Fees Will Do for You:

• Save you from the stress of “Omonile (indigenous landowners) wahala” and unnecessary fees like “owo foundation, owo decking, owo roofing, owo fencing, owo borehole, owo youths,” etc.
• Provide interlocked streets and a well-laid-out estate.
• Ensure a good drainage system.
• Provide electricity and street lighting.
• Secure a gatehouse and perimeter fence.
• Save you excessive documentation fees (most lawyers ask for 5% of the cost of land).
• Get your land survey done at a discounted fee.

Are Statutory Fees Hidden?

Statutory Fees are not hidden as they are clearly stated in the forms and FAQ/Terms & Conditions of the property. Understanding these fees will help you see why they are important and why they are required by law.

Conclusion

When buying land, it’s important to look beyond the advertised price and consider statutory fees like survey fees, documentation charges, and development levies. These fees are essential to ensure that the land transaction is legally binding and that you receive the necessary infrastructure and amenities.

By understanding these expenses upfront, you’ll be better prepared financially and avoid unnecessary stress. Always read the terms of your purchase agreement carefully and ask questions if anything is unclear. A good real estate firm will be transparent about all the costs involved and guide you through the process. If you plan well, buying land can be a smooth and rewarding experience.