ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.

I Umar
Course Title: Property Rating and Taxation, I Course Code: EST414 Class: HND II
Contact Hours: Two Hours 2 First Semester: 2020/2021 Academic Session

1.1 MEANING OF PROPERTY RATING

The property Rating and Taxation System is defined as the whole activities that are carried out from the
approval of the enabling law to the collection of assessed taxes. The process is not complete until the billed
rates are collected and paid into the treasury of the concerned local government. The product of rating,
which are the property rates are local taxes imposed upon owners (Nigerian System) or occupiers (British
System) of landed property in respect of landed properties they own or occupy. Property rate is “a local
form of tax on property, the proceeds of which are used for local purposes of a public nature. Property
rating is a good option for financing and maintaining community infrastructures as the tax can generate
huge revenue sufficient to finance community projects.

1.2 TRACE THE HISTORY OF RATING GENERALLY

The creation of more state in Nigeria in 1976 gave rise to new urban centers, 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 centers 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. Property rating valuation is a statutory practice backed up
by law. In Nigeria and many other countries that adhere to the UK property rating practice, the standard
methods of valuation adopted are the comparison, the depreciated replacement cost and the profit methods.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar

1.3 HISTORY BACKGROUND OF PROPERTY RATING IN NIGERIA

Property rating in Nigeria has its origin from the laws of United Kingdom. The rating law in Britain
originated with the poor relief Act of 1601, which provided for the levying of taxation on every occupier of
land house etc. The first trace of Nigerian legislation on property rating is found in the laws of the
federation of Nigeria Assessment ordinance of May 1915. In 1932, the above law was amended to allow
for rating of unimproved values. The area called, the Lagos protectorate had her own law too. The
Northern, Eastern and Western Regions are also on record to have equally legislated on property rating.
Such other amendments include:
- Cap 16 of the 1948 Edition of the law of Nigeria
- Nigeria Legal Notice No 47 of 1951
- Nigeria Legal Notice No 131 of 1954
- Nigeria Legal Notice No 47 of 1955
- Caps 15 and 16 Assessment Ordinance of the Laws of the federation of Nigeria and Lagos, 1958.
The most significant of the above enactments is the 1958 Act Today. It is regarded as the principal Act in
the Federation and it provided for the rating based on Annual Value, as the governor or the equivalent
authority might direct. In Nigeria today, state laws or edicts modeled more or less on the above. act form
the basis of rating in various states of the federation. At first there were: The assessment law of Lagos; the
laws of Northern Nigeria 1963; the laws of Western Nigeria 1963; the laws of Eastern Nigeria 1963; in
Eastern Nigeria, firstly on creation of states in 1967. The East Central State of Nigeria adopted cap II of the
Laws of Eastern Nigeria for property rating as amended by: The Assessment (Amendment) Edict 1972
(Edict No 8 of 1972); the property rates Edict 1972 Edict 140 1972; the Assessment laws amendment Edict
1973 or Edict No 6 of 1973; Property Rates Ordinance 1973 or order No 10 of 1973; and the control of
Rent Edict 1973 le Edict No 4 of 1973.
After the creation of states in 1976, new edicts and laws were made by various states of the
federation. The Eastern Central State was divided into Anambra and Imo State. In Anambra State. The
relevant enactment is the part III of the local government. Edict 1976 le Edict No 9 of 1976 while in Imo
State of Nigeria Edict No 20 of 1976. It is however important to add that all these enabling laws now have
based on the federal government. Reforms of 1976 and 1979 constitution of the Federal Republic of
Nigeria.
Before the advent of democracy, the Military government enacted Decrees and Edicts at Federal
and State levels respectively. States enacted Local Government Edicts that included property rating related
matters. Today, the State House of Assembly is now responsible for legislating on Local Government
related matters pursuant to Section 7 (6) (b) and 4th Schedule of the Constitution. The Local Government is
enabled by law to levy property rates on property owners/occupiers within their jurisdiction. There are two
main systems of rating namely, the ownership rating and the occupation rating. In the ownership rating
system, the burden of property rate is to be borne by the owner while the occupier bears the burden of
paying property rates in the occupation system. The most practiced system of rating in many Nigerian
states is the ownership rating system.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
2.1 ADOPTION OF SYSTEM OF RATING (RATING AUTHORITY)
i) The adoption of a system of rating by a resolution of the rating authority.
ii) Before the authoring votes on the resolution at least sixty day’s intention to move such resolution shall
be given and copy of the proposed resolution shall be exhibited in conspicuous place near the office of
the authority (Edict No 9 of 1976 section 105).
2.1.1 Order for Method of Assessment (State Commissioner / Governor) Sec 106
i) The commissioner has to make an order specifying the method of assessment of tenements.
ii) An order made under this section may provide for
iii) The assessment of tenements generally; or
iv) The assessment of any particular class of tenement; or
v) The method of assessment of any such tenement in any areas specified in the order (106).
2.1.2 Appointment of Appraises (State Commissioner or Currently the State Government) (Sec 107)
For the valuation of the tenements for rating the commissioner shall appoint persons to be
appraisers for that purpose. By implication of the Estate Surveyors and valuers decree (No 24 of 1975),
only Estate Surveyors and valuers can be appointed appraiser in Nigeria. Generally, the tenement rating
laws provide of the powers of appraisers (sec 116) as follows:
a) Require any person to give all such information orally or in writing as he may require which may affect
the assessed value of a tenement.
b) Call upon any person able to pay a rate upon tenements to exhibit to him any accounts, receipts for rent,
rent books, or other documents required in connection with valuation of a tenement.
c) On any day (except a non – working day) between the hours of 7 am and other particulars as he many
deem necessary for the purpose;
d) Require the owner or occupier of any tenement actually rented, to make a declaration of any tenement
actually rented, to make a declaration in writing as to the yearly rent paid or payable of the same;
e) Require the owner or occupier of any tenement of inform him as to the boundaries of the tenement.
f) Require the owner or occupier of any tenement to inform him as to the boundaries of the tenement.
g) Generally, require the owner or occupier to furnish information, which in the opinion of the appraiser
may affect the annual value of the tenement.
2.1.3 Assessment of Public Utility / Corporations (Sec. 109)
i) Assessment in respect of tenements occupied by a public utility corporation, other than tenements used
as dwelling houses, shall be of the depreciated capital value of such tenements assessed as provided for
in subsections (2) and (3) of this section.
ii) The depreciated capital value of a tenement shall be the amount assessed to be the cost of the
replacement of the tenement at the prices prevailing at the time of assessment account being taken of
the age and structural condition of the building.
iii) In assessing depreciated capital value no account shall be taken of the value of:
a) Any machinery in or up the tenement
b) Any railway tracks provided that in assessing, the value of any building in which a portion of such
track is situate the area of land on which such track is situate shall be included in the assessment of the
value of such building.
c) Any fencing, earthworks, bridges, signal boxes and other signal apparatus, or water towers’ and
equipment of a like nature relating to any railway tracks;

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
d) Any railway station platform, together with any roof or canopy thereto, but subject to paragraph (d)
for this subsection, not including any building erected upon such platform.
iv) In this section: “Dwelling – house” means a hereditament used wholly or mainly for the purpose of a
private dwelling or private dwelling, with or without any garage, outhouse, garden compound, yard,
court, forecourt or other appurtenances. “Public utility corporation” means any federal or state
statutory corporation or any other public body providing public utility services which the military
governor may be notification in the state gazette declare to be treated as public utility corporation for
the purpose of this field.
2.1.4 First General Assessment and Subsequent General Assessment (Sec 111)
i. As soon as may be after a rating authority has adopted a system of rating upon tenement, the authority
shall cause the value of every tenement subject to rate in the concerned to be ascertained and assessed
by an appraiser, and such assessment shall be known as the first general assessment;
ii. Not loss than once in every five years after the completion of a first general assessment or such longer
period as may be prescribed by law, the rating authority shall cause a new general assessment to be
made, in the manner provided by the Edict of this section, of energy t tenement subject to rate in the
area concerned.
2.1.5 Annual Assessment (Sec. 112)
In every year in which there is no general assessment the rating authority shall in the mouth of June, or as
soon as conveniently may be thereafter, cause the value of any tenements: -
a) Which being ratable require reassessment because whether by building, destruction of building, or other
alteration in structural condition, then assessed value has been increased reduced; or
b) Which being ratable or about to become ratable have not been assessed; or
c) In respect of which any person claiming to be the owner thereof shall have delivered to the rating
authority a written request for reassessment on or before the first day of the preceding April to be
assessed.

2.2 STEPS THAT CAN BE TAKEN TO SUCCESSFUL IN PROPERTY RATING

ADMINISTRATION
a) Keep proper records for the rates collection. A rete collection register should be kept.
b) If possible, the rating administration should be computerized.
c) Periodic checks and supervision should be regularly conducted.
d) Receipts must be checked with payment returns.
e) The value in valuation list should not be altered without the knowledge of the valuation officer.
f) The director of valuation must sign relevant papers to affect any alteration.

2.3 PATIES INVOLVED IN RATING ADMINISTRATION

a) The law-making body of the state (the state house of assembly).
b) The state commissioner responsible for local government matters.
c) The local government council.
d) The appraiser.
e) The rate payer

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
2.4 REASONS FOR LEVYING PROPERTY RATE
The main reason for levying property rate is to improve the quality of the environment and to stop the
degeneration of the environment and make it conducive for human habitation. Providing the necessary
facilities is cost intensive and because money at the disposal of the Local government may not be enough,
it becomes imperative for the Local government to levy rates. Although a number of financial sources are
available to the local government, property rating is one of the viable means. Other sources include:
a) Major Source; grant and aid, local government consolidation fund, loan, commercial tax, value added
tax (VAT), market fees, motor park fees.
b) Minor Sources; donations, entertainment charge, tourism, pool/betting tax.
c) Other Sources; wheel-barrow fee, truck license, slaughter fee, marriage registration fee, advert license,
radio license, fishing license.
d) Federal Funds; statutory allocation from the federation accounts, custom duties, loans, grants and aids.
e) State Fund; earning from state public entertainment, pools, betting and lottery, loans, grants and aids.
Apart from the primary reason of property rate being to generate funds, there are some other reasons why
rates are levied on properties. These are:
i. Property rating is responsive to economic growth.
ii. The yield from property rating are predictable and as such helps in planning.
iii. Property rating also help in achieving social equity.
iv. It offers ease of administration than other forms of taxation.
v. It offers ease of administration than other forms of taxation.

2.5 MAJOR COMPONENTS OF PROPERTY RATING

The key components making property rating exercise are: the reconnaissance survey for the purpose of
identification of properties in the area; enumeration of ratable hereditaments; main rating valuation using
field data of the subject properties and compilation of valuation list; the main aim of rating is to supplement
local revenue for neighborhood facilities and services provision. Property rating has inherently
accommodated all relevant components of any good tax system; for instance, for property taxation to
achieve positive impact, it requires:
i. Equitability: The procedure of rate assessment should be fair, just and easy to understand; it should
consider the local economy of the community as well as property value.
ii. Viability: The cost of the exercise must not outweigh the expected revenue, so that the revenue can
finance community infrastructure and services.
iii. Convenience that the rate liability should be affordable.
iv. Full identification and definition of tax object and Appropriate penalty prescribed to defaulters,
considering ability to pay, benefit to be derived, time and manner of payment.

3.1 PRINCIPLES GUIDING ASSESSMENT

Scholars identified that there exist principles that guide the assessment of properties for rating and taxation
purposes. The ability of the Local government to take advantage of this viable source of revenue available
to it will determine it rate of development and level of sustenance. Bujang and Abu Zarin (2001) are also of
the same view; according to them the effectiveness of a local government is dependent on its ability to
increase its revenue from taxes. Rating is a mainstay as far as government revenue is concerned and he

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
identified the following as being germane to local taxation; Local taxes should fall within the jurisdiction
of a local government and transparency and wide acceptability. In contrast, Alberta Urban Municipalities
(2012) opined that objectivity, equity and uniformity should be the watchword in assessment. For a
property to be liable to payment of rates, four conditions have to be met in such property (Oyegbile, 1996).
These conditions include:
a) Actual Occupation: there must be actual physical possession of a property for it to be liable for the
payment of property rates. It does not really matter whether such an occupier is the freeholder or the
leaseholder, provided such occupier has been vested with the right of usage or mortgage. It is only in
physically occupied properties that rating officers can levy and collect property rates as appropriate.
b) Beneficial Occupation: the property must be of benefit to its owner or occupier for it to be liable for
the payment of property rates. This benefit need not be pecuniary; it could be any other benefit
accruable to the occupier or owner of the property.
c) Exclusive Occupation: for a property to be liable for the property rates its owner or occupier must
possess an exclusive right on it. Such a right that is exercisable against every other person.
d) Permanent Occupation: occupation has to be permanent for a property to be rateable. Where
occupation is just for a short while, the property will not be liable for the payment of property rate.
Where a property is suffering from void the owner may not be willing to pay rates. However, in other
countries owners of void property are required to pay half rate. This is referred to as empty rate and it is
paid three (3) months after the emptiness of the property. For a new property, empty rate would be paid
after six (6) months of emptiness. This is however, not applicable in Nigeria.

3.2 COMPONENTS OF PROPERTY RATING

i. It is a form of property taxation.
ii. It is levied on either the occupier or the owner of a property.
iii. It is levied by the local government.
iv. It is levied to raise fund.
v. The fund so generated are meant to finance developmental projects in the community.
vi. It is meant to improve wellbeing be providing the necessary amenities.

4.1 PRINCIPLES OF ASSESSMENT AND TENEMENT RATES COLLECTION

The word assessment, in rating, is wider in implication and application then valuation. Assessment refers
to the general process and procedures of setting up the rating machinery as well as the determination, and
the procedure thereto, of the taxable value of the tenement / property on which the tax burden is calculated
in accordance with the Enabling Law. Consequently, rating valuation is only a part of rating assessment.
Assessment embodies all the processes and procedures leading to the determination of the defined value.
WEBSTER ENCYCLOPEDIA dictionary defines assessment as the Act of assessing; appraisal; evaluation,
an amount assessed as payable; an official valuation of taxable property; an assigned value. The legal and
procedural part of a rating assessment in Nigeria is covered and legitimized in the rating law which is part
of local government Act (Edict) of various states but, generally with uniform provisions. The observation
of the assessment provisions of the law are condition precedent to any proper and legitimate valuation.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
4.2 COLLECTION OF RATES
The collection of rates is carried out by the issuers of the demand notice (dd) to the persons liable to pay
rate by the collector. The rating authority gives notice of any rate demand by it and on which such notice
shall became due and payable such notice be affixed in a public on conspicuous place within the local
government area or by publishing copies of the in one or more news papers circulating in the local
government area. The tenement rate due is payable to the rating authority or its agents authorized to collect
or collect some. A rate payer is expected to pay within the time prescribed in the notice of demand. In the
event of his failure to pay within stipulated period he shall be liable to the payment of a surcharge at a
given rate percent per annuum from the date after the expiration of period allowed. The law provides for
the computation of rates as follows:
i) A rate upon tenements, other than tenements required to be assessed at their depreciated capital value,
shall be at a uniform rate per naira of the assessed value of each of the tenements in the areas subject to
the rate.
ii) A rate upon tenement required to be assessed at their depreciated capital. Value shall, for each of such
tenements in that area subject to the rate, be the amount represented by five per cent um of the value so
assessed multiplied by the uniform rate per naira referred to in subsection (1) of this section.

4.3 LIABILITY TO PAY RATES

The persons liable to pay tenement rates are the occupier and the owner. The appointment and duties of rate
collector could be an employee of rating authority or any other person appointed by the rating authority.
The duties are the collection of rates, rendering of the rate collection to the rating authority. The assignment
involve in the process of rate collection are:
a) Sending Demand Notice: DD notice are sent to the owners whose properties have been entered in the
valuation list. The demand notice contains the following:
i. Name of owner of the property.
ii. Address of property.
iii. Location of property.
iv. Rate payable.
v. Assessed value of property.
vi. Where to pay.
vii. Whom to pay to.
viii. Time duration within which the bill must be paid.
ix. Penalty for not paying within stipulated period.
NOTE: Demand notice are sent twice. The first one is the dd notice and second is the second dd notice sent
after a month after first one. Penalty cannot be imposed except the two demand notices have been sent and
has been ignored by the rate payer.
b) Settlement of Rates Bill: Once the rate payers received their bill the settlement commences. Offices
should be designated as collection centers and account clerks should always be ground to attend to
them. All payment should be recorded and receipts issues so that records of all rate payers can be
obtained and defaulters can be discouraged.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
4.4 IMPLICATION OF DEFAULT AND THE ACTION TO BE TAKEN RECOVER
The defaulters can be grouped into two (2) see table below:
S/N DEFAULTERS BY THE RATE PAYERS DEFAULTERS BY THE RATE COLLECTOR
1 Defaulters by the ratepayer is failure to pay rate as Defaulters by the collector is occurs as a result of:
at when due. This is a serious offence: i. Unauthorized collection of rates.
i. Distraint: A breach warrant from the ii. Authorized but misappropriate of collected
court is a means to recover it. This money.
involved seizing of the hereditament iii. Over collection or under collection of rates from
which is the subject of default for the rate payer with the intention of cheating
compelling compliance. This notice is either the rating authority or the rate payer.
very difficult to enforce because the paper
will resist any step taken to use the
method.
ii. Recovery of the amount: Due to as a
civil debt including the surcharge due and
all other cost incurred. This is where the
court ensure that the amount is paid and
all other incurred.

4.5 OFFENCES AND PENALTIES RELATING TO RATES

Offences relating to rates and the usual sanctions as stipulated in some rating Edits are as:
a) Failure to comply with the request from an appraiser and with no reasonable excuse.
b) It is an offence to hinder, prevent and obstruct any employee of or agent from the entering, insecurity
or measuring any tenement. The penalty is a fine or imprisonment or both.
c) It is an offence to disobey summon refused without sufficient cause to produce any document in this
possession mentioned in the summons. The penalty for such offence is a fine may not include
imprisonment.
d) Inciting a person to refuse to pay rate is an offence which attract fine or imprisonment.
e) It is an offence under some states rating laws to collect rate without authority from the Director of
valuation or the rating authority. The penalty is imprisonment.
f) An attempt to collect rate illegally is also an offence where found guilty and is liable to imprisonment.
g) It is an offence if a rate collector fails to raring authority or demand from any person in excess of the
duty assessed rate or falsifies receipt with intention to cheat the rating authority, if found guilty is
liable imprisonment without the option of fine.

5.1 EXEMPTIONS AND RELIEFS

Exemption is the freedom from the burden or liability of paying property rates. Some properties by virtue
of their status are exempted from payment of property rate. These are usually properties that of benefit to
the public. Exemption is basically into three that is Exemption by Common Law, Exemption by Nature
and Exemption by Statutory Provision. It is expected in any taxation exercise that not all members of the
community will be listed as being due to pay. This is so, though taxes by their nature are meant to be
compulsory. There are situations when an individual or corporate institution is allowed to be left out of the
list of all those short – listed for a particular form of tax. The reason or basis for such exemptions is
normally identified, stated and well laid down.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
Exemption occurs when freedom liability to pay the rate is granted. It is freedom from an obligation
to pay a tax. Historically, the liability to pay property rates is not limited to any real or personal property.
This was the case under the first known property rate law. Poor rate relief Act of 1601. By the turn of the
century, the poor rate exemption Act 1840 was promulgated. The law was to free personal property and
some incorporeal hereditaments like advertisement and sporting rights from liability to pay rates. By that
law in the United Kingdom the general rule became that only real property because subject to rating
assessment.

5.2 TYPES OF EXEMPTION

There are three categories of exemption namely: Common law exemption, Natural exemption, and
Statutory exemption.
a) Common Law Exemption: These are properties that are exempted by the common law. These are also
properties that are under the state or crown ownership in Britain. Similar or comparative properties in
the colonies under Britain also fall under this category. These groups of properties are classified as
common law exemptions.
b) Natural Exemption: This is because they are suffering from sterility. This group of properties is
described as suffering from sterile occupation. For example, land dedicated to general public use lie
public parks and public libraries.
c) Statutory Exemptions: This applies in the case of properties exempted by statutory provisions. That
is, there are laws passed by a legislative house with full powers freeing the property from liability of
rates. Exempted hereditaments under these are called statutory exemptions.

5.3 SOME CATEGORIES OF EXEMPTION PROPERTIES

a) Agricultural Land and Buildings: Normally, agricultural land and buildings are exempted from the
valuation list. The definition of agricultural land is very specific. It does not include: “Land occupied
together with a house as a park garden (other than as mentioned in the law), pleasure grounds, or land
kept or preserved mainly or exclusively for purpose of sport or recreation or land used as a race course;
and for the purpose of the collage garden. Cottage garden means a garden to a house occupied as a
dwelling by a person of the laboring class” – sec 26 (3) of the general Act of 1976. The land devoted
for agricultural production should be differentiated from land occupied by families of farm owners
should be rated especially as most of them are located outside the farm or rented from others not
engaged in agriculture.
b) Privileged Properties: Privileged properties are properties occupied by person(s) or organizations that
are entitled to diplomatic immunities or concessions are considered as privileged properties. Under
international laws and international relations, the diplomatic privileges Act of 1908 and international
organization privileges and immunities Act of 1850, exempts Ambassadors / High Commissioners,
their servants and quarters from paying property rates on all properties occupied by them. List of
organization which properties and covered under this privileged class includes UNO, OAU, EEC, NAT
organization or other similar bodies that are signatories to international agreements. However, such
person and their staff are normally required to contribute some money to the Rating Authority in lieu of
rates.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
c) Charitable and Other Similar Institutions: In most of the world where property, rating is carried out
charitable and other similar institutions are considered for exemption or relief from rates. In the U.K,
for example, the general rate Acts of 1967 allows the amount payable to be halved in case of:
i. Any hereditament occupied by trustees for a charity and wholly or mainly used for charitable
purpose (whether of that charity or of that and other charities) OR
ii. “Any other hereditament being a hereditament held upon trust for use or an almshouse….” Such
bodies must be for philanthropic or charity, such as Education project, welfare schemes, promotion
of science, literature and fine arts. Also, recreational properties are exempted from rates. Profit
making organizations are usually rated. The responsibility of determining those to be exempted or
granted relief lies with the minister. The minister normally specifies in the state gazette all the
categories of persons and institution that are relieved from the liability to pay rates.
d) Educational Properties: Educational properties are properties occupied and used for the promotion of
education science and technology. Such properties are absolved from liability to pay rates. These kinds
of properties include school buildings, libraries, reading hall, and research institution for advancement
of science and technology. However, Educational properties privately and devoted for the proportion of
individual interest or which are run for profits are not free from the rate. Only public educational
properties are exempted or granted relief.
e) Religious Properties: Religious properties for the purpose of this topic can be subdivided into (3) three
categories namely: Churches and chapels, Mosques, and Other religious buildings. Churches and
chapels are absolved from liability to pay rates and this tradition dates back to 17 th century in the
United Kingdom. Section 39 (2) exempts places of public religious worship which belong to the church
of England or to the church in Wales or which are for the time being certified as required by law as
places of religious worship and so used for purpose of the organization responsible for the conduct of
religious worship in that place. Private churches and chapels are not exempted. Public mosques are
exempted from liability to pay rate just like public churches and chapels. Private mosques are required
to honour the liability to pay rate in the same as private churches and chapels do. The general rule must
be extended to all other religious bodies failure to do so could lead to a state of crisis.
f) Government Properties: Government properties could be described as properties owned and used by
the government for general public administration and provision of good and services of public purposes
such properties are exempted from liability to pay rates. The class of government owned properties
range from agricultural, industrial, commercial, transport, institutional and residential. Government
investment in properties is to promote equity, social justice, economic, and political objectives of the
government. These properties include public schools, hospitals military properties administrative
offices etc. However, government may be called upon to contribute an amount in lieu of rates.
g) Pipelines: Under the British law, sewage disposal works that make wide use of pipelines are ratable but
specifically their sewed are exempted. Oil pipelines are not considered for rating but real properties
owned by oil companies and used for offices and production works are subject to rates.
h) Plant and Machinery: Historically, plant and machinery are exempted from rating. Aspects of plant
and machinery considered as part of the hereditament are rated. Examples is such components part of
buildings and structures include lifts, and elevators used for passenger, railways and tramway lines and
tracks and such part of plant or any combination of plant and machinery including gas holders, blast
furnaces, cokes ovens, tar distilling plants, water towers, with tanks etc.

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
6.1 RELIEF
Relief is a condition of abating partially or completely the liability or burden of rates. Persons
granted relief are people who are normally due to pay rates. But for certain reasons are being considered
either a total or partial abatement. Relief is a case where the right to pay the rate is established but
remission granted because of the peculiar condition of the rate payer. Relief is distinguished from
exemption in that it recognizes the right to pay but abate it. Relief acts on the person, but exemption is on
the occupation.

6.2 CONDITIONS FOR RELIEF

a) Where the circumstances giving rise to the grant of a relief certificate or derating certificate have in the
opinion of the Board changed the Board may by instrument in writing revoke the relief certificate or a
derating certificate and a copy of such instrument shall be sent to the Collector of Taxes of the parish in
which is payable the land tax on the land in respect of which the relief certificate or derating certificate
had been granted.
b) A relief certificate revoked pursuant to subsection shall cease to have effect from the first day of April
next following the date of revocation unless the Board in its discretion fixes some other date not being a
date earlier than the date of such revocation.
c) A derating certificate revoked pursuant to sub- 361/1973 section (1) shall cease to have effect from the
first day of S. 10 (b). April next following the date of revocation, unless the Board in its discretion fixes
some other date not being a date earlier than two years prior to the date of such revocation.
d) Where the Board is satisfied that the grant of a 36/1973 relief certificate or derating certificate in
relation to any land was obtained by fraud or the suppression of material evidence, the Board may, by
notice in writing to the person on whose application the relief certificate or derating certificate was
granted or to the person in possession of the land canci1 that relief certificate and, upon such
cancellation, land tax in respect of that land shall be payable as if the relief certificate or derating
certificate had never been granted.
e) A copy of any notice issued pursuant to subsection shall be sent to the Collector of Taxes for the parish
in which is payable land tax on the land in respect of which the relief certificate or derating certificate
had been granted and the Collector of Taxes shall forthwith proceed to collect the amount of land tax
remitted in accordance with the relief certificate or derating certificate prior to its cancellation.
f) Before taking action to revoke or cancel a relief 36/1973 certificate or derating certificate pursuant to
this section, the Board shall-(a) notify the person in possession of the land that such action is
contemplated; and(b) inform the person in possession of the land that he or the person upon whose
application the relief certificate or derating certificate was granted or both of them may, if he or they so
desire, appear before the Board and show cause why the relief certificate or derating certificate should
not be revoked or cancelled, as the case may be.

6.3 RELIEF CERTIFICATE

a) Every person to whom a relief certificate or of land, derating certificate has been granted shall while
that certificate remains in force notify the Board as soon as possible and in any event within three
months of.

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b) Any material changes in the use of that lane or any change in the circumstances giving rise to the
application for the grant of that relief certificate or derating certificate; or
c) Any sale, exchange or gift of the land (or part thereof); or
d) Any lease, license or other disposition of the land (or part thereof) on terms whereby the land (or part
thereof) may be used for any purpose other than that for which it was being used when the application
for the relief certificate or derating certificate was made.
e) Any person who, without reasonable excuse, fails to comply with subsection (1) shall be guilty of an
offence and, on summary conviction thereof in a Resident Magistrate’s Court, shall be liable to a fine
not exceeding one hundred dollars and in default of payment thereof to be imprisoned for any term not
exceeding three months.

7.1 ADVANTAGES OF PROPERTY RATING

In discussing the advantages of this form of taxation, Igwe-Kalu (1998) document as follows:
i. Property is a fixed hereditament, that is, immovable and easy to access for rating purposes. This
immovable characteristic of real estate makes rate evasion almost impossible because it is not
possible to conceal it from assessment neither is it possible for it to be moved to an area where it may
attract lesser rate.
ii. The immovable characteristic of real estate makes it possible for the rating authority to know in
advance what to expect as property rates. This eases the problem of budgeting and planning.
iii. Real estate is a very durable form of investment. This implies that real properties do not deteriorate
easily as most other forms of investment and this provides a very reliable and dependable base for
taxation.
iv. Rating as a source is taxation is very flexible. By changing the tax rate, the revenue collectible from
this source can increase or decrease appreciably. So depending on the requirements of government
and disposition of the entire tax paying public, the tax rate may be varied to achieve equity and a
healthy economic development.
v. Property rating as a fiscal instrument assists in the redistribution of income and wealth. Since it is
taxed on the owners/occupiers of property, the application of the proceeds in the provision of social
services and goods improves the state of the poor.

7.2 CHALLENGES OF PROPERTY RATING ADMINISTRATION IN NIGERIA

Enahoro and Olabisi (2012) carried out a research to assess the overall efficiency of rating administration
in Somulu, Mushin, Ikeja, Kosofe and Surulere LGAs of Lagos state and discovered that the administration
of rates in Lagos is not very efficient and conclude that if the collection of property rates is handled by
consultant firms the rating administration system in Lagos state would improve. The administration of
property rating in Lagos State is similar to what is obtainable in other parts of the nation. Naiyeju (2005)
found that rating administrators in Lagos State local governments does not have the needed competency to
efficiently administer rates. Fashola (2009) cited in Ayandeji (2012) identified corrupt practices on the part
of rating officials and lack of competent rating officers as factors that weaken people’s trust in the system
and as a result, has significantly reduced yield from rates.
Ekpo and Ndebbio (1998) cited in Ayandeji (2012) identified personnel inadequacy in terms of
quality and quantity as a major problem. He affirmed that there are numerous cases where

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unknowledgeable team made up of messengers and casual workers which have little or no knowledge about
how rates should be administered and the laws and regulations governing property rating are sent out on
administrative duties. In other instances, corrupt rate officials connive with rate payers by collecting bribe
so they do not have to bear the full burden of property rate levied on them or the officials fail to remit in
full the money collected during a rating exercise. Rating clerks in various rating departments too are not
exempted from this dubious act, they receive bribe from rate defaulters who do not want to be arraigned
before the law court. Of course, there are upright rating clerks and officials but the percentage of the
dishonest ones is overwhelming. A great number of these rating officials live well above their means and
their extravagant lifestyle is not funded by their legit earnings (Naiyeju, 2005).
Adebisi (2010) in his research to appraise the administration of taxes in Kogi State, identified lack
of power by revenue Appeal Courts, poor staffing and equipment and corrupt practices by tax officials as
some of the problems of tax administration. Data was gotten through interviews and questionnaires and the
analysis of this data revealed that taxation in the state is not performing so badly, as a matter of fact,
revenue from taxes forms about 40% of the state’s internally generated revenue (IGR). Muhammad and
Ishaku (2013) assessed the prospects of property tax administration in Bauchi State using data gotten from
the state’s Board of Internal Revenue and Ministry of Lands. Their study indicated that only a few forms of
property tax are operational in the state, this they attributed to lack of political will as well as poor record
keeping. They proffered that more professionals be employed by the Board and the Ministry of Lands and
that laws that have been put in place be enforced.

7.3 PROPERTY RATING ADMINISTRATION AROUND THE WORLD

Monkam (2010) in his working paper to ascertain the administration of property related taxes in selected
Francophone African nations (Burkina Faso, Cameroon, Central African Republic, Chad, Comoros, Côte
d’Ivoire, Democratic Republic of the Congo, Gabon, Madagascar, Mali, Mauritania, Rwanda, and
Senegal.). He established that property taxation are restricted to city center’s usually capital cities where
the enforcement of land tenure is better practiced. This he attributed to customary land tenure system that
exists in some of the countries where local chiefs, heads of families and villages are custodians of land. The
central government in those nations do little as regards having an encompassing land tenure system. Rural
councils are charged with the responsibility of allotting land to people who would put them into gainful use
in accordance to their custom (Bruce 1998; Monkam 2009a; 2009b) Due to their colonial histories,
Francophone nations operate a property tax administration system similar to those of the French and
Belgian. In Burkina Faso, taxes are levied on the occupation and use of public land (“taxe de jouissance”)
and on rental income from buildings and unimproved properties. In Mali, taxes are levied on gross rental
income and profits.
Monkam (2010) identified that the upmost issue of concern for Francophone nations in rating
administration is their inability to properly assess properties i.e. choosing an equitable rating assessment
regime in which property rating burden will be fairly distributed. As postulated by Franzsen (2008), this
assessment may be based on the size of the property or on the value of the property (annual or rental
values). Assessments such as these can only be carried out by skilled Estate surveyors who are insufficient
in most of these countries. Assessment would prove a futile exercise if collection is not properly carried
done. Tax evasion and avoidance is a common feature in Francophone nations and a significant proportion
of revenue is forfeited due to the ineffectiveness of mechanism to enforce the payment on the part of rating

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
administration authorities. Other issues identified by Monkam (2010) associated with the administration of
property rating in Francophone nations include:
i. Inadequacy of both human and financial resources.
ii. Influential people such as political and religious leaders tend to use their influence to exclude their
properties from being taxed.
iii. Rate payers usually withhold relevant information about their properties from rating officers.
iv. Identifying owners of unimproved property is usually a difficult task.
Monkam (2010) suggested that administrative staff be adequately trained, property rating
administration and assessment be fully computerised with the use of Global Positioning System Units
(GPS), Total Stations and Geographic Information System (GIS). He also advocated that if property tax is
converted to benefit tax, the problem of non-compliance on the part of prominent members of the society
will be dealt with. In Tanzania, a series of research have been carried out by different researchers to assess
the administration of property rate and taxes. Lubua (2014) indicated that compliance is an issue
confronting the administration of property rates and taxes in Tanzania. He noted that this is influenced by
property rating laws and suggested that efforts need to be made to raise the level of awareness of rate
payers. Machogu & Amayi (2013) and Aiko (2013) were of the opinion that educating rate payers plays a
major role in ensuring compliance. This they said could be done by including tax education in the
educational curriculum. Epaphra (2014) opined that revenue from property rating and taxation would be
given a major boost in Tanzania by enforcing property rating administration without necessarily increasing
property rates.Kamba (2007) conducted a research to analyse and describe the problems of administering
property taxes in Uganda’s largest city, Kampala. He discovered most of the problems to be atpolicy and
administrative levels. His research supports the argument that return from rates is weakened by issues
related to lag in collection, poor enforcement, corruption, political interference as well as inability of the
government to provide necessary infrastructural facilities.
Mohammed (2013) investigated the issues of low property rate revenue generation in Pasir Gudang
Municipal Council of Malaysia and identified non-compliance as the major reason. Questionnaires were
used to obtain data and the analysis of data revealed inadequacy of infrastructural services and facilities
provided by the government as the reason for non-compliance on the part of payers. He established that
compliance on the part of rate payers is a function of the ability of the government to provide public
amenities in the study area. Habibu, Ishak, & Normala (2012) appraised property rating administration in
Ipoh, Malaysia and pointed out incomprehensive valuation lists, poor coordination of assessment
mechanism the use of outdated data in rating valuation as the bane of property rating in Ipoh, Malaysia.
They also stated that regardless of these, revenues from property rates remain a mainstay for the local
government. They suggested that rating staff be adequately trained in the use of modern and automated
methods of valuation, reassessment should be carried out regularly to taken prevailing market trends into
consideration and also capture new properties. Pandey, Chhetri, & Baskota (2012) identified property rates
as an integral part of the revenue available to the Nepal government. During the 2011-2012 fiscal year,
71% of the total local taxes collected by the local government were from rating. It forms 33% of IGR and
7% of the total revenue available to the local government. They went further to state that capacity and non-
compliance are the reasons why the local government has not been able to take full advantage of this
revenue source. Three issues were identified as the challenges confronting the local authorities in the
collection of property rate. These are: Low Human and Physical Resource, Low Compliance, and Lack

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of Incentive. They recommended capacity building, educating the taxpayers in other to build their
confidence and boost compliance and make incentives available for taxpayers and tax officials. In the
Philippines, Guevara (2012) pointed out that though identifying rate payers and collection of rates are still
a problem, some level of successes have been recorded in certain quarters. For instance, in Marikina,
residence complies with payment of property rate owing to the efficiency of public infrastructure and
services made available by the government. In places like Naga and Mandaluyong, the use of computerized
programs has helped to tackle corruption in the administration of property rates and taxes. According to
Rao (2012), property rating and tax administration in India is faced by problems such as high cost of
collection, low capacity, difficulty of valuation, high compliance cost and poor information system. As a
result, yields from property rating have not been contributing enough to the revenue available to the
government Rismaharini (2012) reported that in Indonesia, administration of property rates were passed
down to the local government in 2010. Surabaya (the 2nd largest city in Indonesia) started administering
property rates in 2011 and has been very successful contributing to 51% of the local revenue of Surabaya.
Rismaharini attributed this to the use of ICT in valuation, professionalism of the tax officers as a well as
their ability to set rates that are appropriate. Kelly (2000), in his working Paper presented at the National
Tax Association’s 92nd Annual Conference on Taxation revealed that administration of property rating in
East African is ineffective because administrative components put in place are not efficient. Rate payers
also lack adequate education about the procedure of rating. Support from relevant stakeholders in terms of
implementation of tax laws is another problem he identified.

EXAMPLES ON PROPERTY RATING ADMINISTRATION AROUND THE WORLD

S/N COUNTRY EXAMPLES
1 TANZANIA In Tanzania, a series of researches have been carried out by
different researchers to assess the administration of property rate
and taxes. Lubua (2014) indentified that compliance as an issue
confronting the administration of property rates and taxes in
Tanzania influenced by property rating laws. He suggested that in
order to raise the level of awareness of rate payers, serious efforts
should be made. Machogu and Amayi (2013) were of the opinion
that educating rate payers plays a major role in ensuring
compliance. This they said could be done by including tax
education in the educational curriculum
2 INDIA Property rating and tax administration in India is faced by
problems such as high cost of collection, low capacity, difficulty
of valuation, high compliance cost and poor information system
(Rao, 2013). As a result, yields from property rating have not
been contributing enough to the revenue available to the
government
3 MALAYSIA Habibu, Ishak and Normala (2012) appraised property rating
administration in Ipoh, Malaysia and pointed out
incomprehensive valuation lists, poor coordination of assessment
mechanism the use of outdated data in rating valuation as the
bane of property rating in Ipoh, Malaysia. They also stated that
regardless of these, revenues from property rates remain a
mainstay for the local governments. They suggested that rating
staff be adequately trained in the use of modern and automated
methods of valuation, reassessment should be carried out

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
regularly taking prevailing market trends into consideration and
also capture new properties.
4 INDONESIA Rismaharini (2012) reported that in Indonesia, administration of
property rates were passed down to the local governments in
2010. Surabaya (the 2nd largest city in Indonesia) started
administering property rates in 2011 and has been very successful
contributing 51% of the local revenue of Surabaya. He ascribed
this to the use of ICT in valuation, professionalism of the tax
officers as a well as their ability to set rates that are appropriate.
5 UGANDA Kamba (2007) in his study on the problems of administering
property taxes in Uganda’s largest city, Kampala discovered most
of the problems to be at policy and administrative levels and
concludes that return from rates is weakened by issues related to
lag in collection, poor enforcement, corruption, political
interference as well as inability of the government to provide
necessary infrastructural facilities.
Source: Ayandeji (2012), Analysis of Property Rating Administration in Kaduna State.

8.1 PRINCIPLES OF NATIONAL FINANCE.

The National Finance Center (NFC) is a federal government agency division under the United States
Department of Agriculture that provides human resources, financial and administrative services for
agencies of the United States federal government. NFC's customer base is composed of more than 130
federal organizations, representing all three branches of the government. The Principles of national finance
includes:
1. Economic activities of the state: The scope of public finance was confined to the traditional functions
of the state, that is, provision of defense, law and order, justice and civic amenities. But with the
emergence of welfare states the scope of public finance was broadened public finance now includes the
use of the budget as a tool to correct distortion in the economy, to mobilise resources, to maintain price
stability create employment prevent market failure, achieve growth equity and maximize social welfare.
2. Functional Finance: The government should maintain a reasonable level of aggregate demand at all
times by using the budget. Most developed economies followed functional finance policies in orderto
control trade cycles. Developing countries followed such policies to promote economic growth.
3. Fiscal Operations: The scope of public finance includes fiscal operations and their objectives. Fiscal
operations refer to raising public revenue, spending to achieve certain goals and financial
administration. For such operations, the government uses fiscal tools like taxation, public expenditure
and public debt. The following are the objectives of fiscal operations;
4. Allocation of resources: The most important objectives of fiscal operations is to determine how the
Country’s resources will be allocated to different sectors of the economy in order to achieve
predetermined goals. The national budget determines how funds are allocated to different heads of
expenses. The policy of public expenditure is used by the government to directly undertake resource
allocation for different sectors. On the other hand, the government can use taxation and subsidies to
indirectly influence resource allocation.
5. Economic growth: In developing and underdeveloped economies, the objectives of fiscal operations
are more promotional in nature. The basic focus of fiscal operations in such economies is the use of

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ATAP BAUCHI// ESTATE MANAGEMENT AND VALUATION DEPARTMENT Lecture Note Prepared BY: Mal U.I Umar
budgetary operations to achieve growth and development. This is done by encouraging capital
formation and investments through public expenditure and tax incentives to private sectors.

8.2 A SAMPLE OF NATIONAL FINANCE

1. Set financial goals: It’s always good to have a clear idea of why you’re saving your hard-earned
money.
2. Create a budget: Consider this your monthly cash flow and savings/investing plan.
3. Plan for taxes: It can go a long way toward helping you keep more of your money next year.
4. Build an emergency fund: All the planning in the world won’t help if life throws you a curveball and
you’re not prepared financially.
5. Manage debt: Understanding and managing debt is a key part of creating a financial plan.
6. Protect with insurance: Life can change in an instant. People with a good financial plan hope for the
best, but plan for the unexpected.
7. Plan for retirement: Even if it’s a long way off, think about what you want your money to do for you
when you retire, and create a plan to make it happen.

8.3 HOW NATIONAL FINANCE MAKE AND COLLECTED

Revenue and Expenditures, below is a list of some of the most common revenues and expenditures in the
world of public finance:
a) Revenue / Taxes: Income tax (personal, corporate), Property tax, Sales tax, Value added tax (VAT),
Import duties, and Estate tax etc.
b) Expenses: Health care, Employment insurance, Pensions, Education, Défense (military), Infrastructure,
and Additional Resources etc.

9.1 RELATIONSHIP BETWEEN CENTRAL AND LOCAL GOVERNMENT FINANCE

a) The central government regulate the speed of local development and adjust inter-regional balance by
imposing control over land quotas. Thus, the central government and local governments have gradually
gained their relatively independent subject consciousness.
b) The power of the local governments derives from the central government's authorization or
decentralization of power. Secondly, while decentralizing the power, the central government withholds
the power to manage important state issues, as was stipulated in Article 89 of the Constitution.
c) The central government regulate the speed of local development and adjust inter-regional balance by
imposing control over land quotas. Thus, the central government and local governments have gradually
gained their relatively independent subject consciousness.
d) Deputy-governors and Deputy-mayors are appointed by the consent of local and central government,
Appointees are quite often central higher officials of the Ministry of Interior.
e) At national level, Policy planning and Standards of service and performance are determined, while
implementation and oversight carried out at national and provincial level.
f) Central government controls over the municipality's delegated tasks -Sometimes there are conflicts
between local government and central government's field administration at provincial and local level.
g) It is the Local Autonomy Act and other laws related that determine to a greater detail central-local and
provincial-local relationships.

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h) The Central Government Ministries have the responsibility of inspecting, monitoring, and supervising
and, where necessary, offering technical advice and training to Local Governments within their
respective sectors as provided in Section 96 of the local Governments Act, 1997 in order to ensure the
implementation of national policies and adherence to performance standards on the part of local
Governments.

9.2 SOURCE OF THEIR INCOME

Source of local government finance implies the various means through which local governments generate
financial resources to meet their financial obligations in the course of discharging their constitutional
functions and duties. There are two major sources of local government finance in Nigeria, namely,
internally generated revenue (which is revenue generated within the local government area of
administration and it entails local tax or community tax, poll tax, or tenement rates, user fees and loans);
and externally generated revenue which refers to the local government funds generated outside the local
government area of administration.
Internally generated revenue is a strategic source of financing local governments operation and
which can be explored given the enabling environment and political will. The level of internally generated
revenue by each local government depends on the size of the local government, nature of business
activities, urban or rural nature of the council, rate to be charged, instruments used in the collection of
revenue, political will and acceptability by the people to pay based on the legitimacy of the council and the
socio-cultural beliefs of the citizens regarding the issue of taxation.
The external sources of revenue to Local government includes: 20% of Federal Government
Statutory Allocation, 10% of Internally Generated Revenue of the State, VAT – Value Added Tax, Loans
and Advances, Special capital grants, Financial Aid and Assistance from individual and organization. The
Local Government Councils (LGCs) have very little influence on their receipts from Federal
Allocation/Excess Crude and VAT unless they improve on their infrastructural developments (roads,
portable water, health centers, hospital beds/cots) and school enrollments. Grants rarely come and when
they do its impact is not well noticed.

9.3 USERS OF THEIR RESPECTIVE INCOME

The ultimate goal of local government is to improve the welfare of its local populace through provision of
educational service, portable drinking water, and health care services with the revenue they generated from
their various sources of income. Hence, this ensures not only the development of the grassroots but also the
nation at large. The important of finance to local government which is accomplished through the
preparation of a realistic annual budget is emphasized. The resources are put together in monitoring terms,
enables the council in providing socioeconomic services to the people of the area at acceptable standard
(Ogbonna D. 2013). The various use through which local government funds are used for are revised as
follows; construction of roads, provision of water, building of clinics and provision of health facilities like
drugs, provision of electricity, construction of market stalls and motor pack, community assistance, claim
and salaries, and miscellaneous purposes (section 7 (2) of 1999 constitution of Nigeria).

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10.1 DEFINITION OF IMPORTANT TERMS
a) Property Rating: Also known as local government value of property paid to local government coffer
as an amount per naira of the dateable value of the property. It is a local government tax based in rates,
which are levied on the basis of ratable values of properties.
b) Rate: Payment for the ownership or occupation of something valuable, that is, rate is payment for the
benefit derived or derivable from services.
c) Ratepayers: Ratepayers are the property owners whose properties are ratable. The word may refer to
occupiers of the property or agents of the property owners especially where the property owners is an
absence landlord.
d) Rating Authority: Means a rating area or a local government charged with the powers to administer
property rating. Where used in this write-up, it applies to Enugu north local government.
e) Local Government Finance: Is the management of inflows of money by the government, that is the
obtaining (of income) and using (or expenditure) of fund.
f) Property Rating Administration: Property rating administration embraced the four board principal
arms involved in property rating namely the assessment, the collection the payment, and the application
machineries.
g) Owner: Includes the person for the time being receiving the rent of the tenement in connection with
which the word is used whether in his own account or as agent of, or trustee for any other person, or
who would receive the sum if such tenement were let to tenant, and the holder of a tenement direct,
from the state whether under lease, license or otherwise.
h) Property: The meaning of property varies not only among individuals but also among professions. To
Estate surveyors and valuer and in fact in legal sense, property consist not of object but of rights over or
in things owned. In other words, property consists of rights which owners exercise over land which
they possess. These rights are: Rights of use, right to claim title to, right of assimilate, and Right to pass
by succession. These rights are referred to as “bundle of right” or property power.
i) Rate Nairage: Means the amount in kobo to be charged on each naira in the assessed ratable value. It
is currently 10k (ten kobo) in Enugu State.
j) Appraiser: In relation to rating is essentially a valuer appointed to assess the value of hereditaments in
the rating authority area.
k) Hereditament: Means any land, tenement or property which are or may become able to any rate in
respect of which valuation list is by the rating Act made possible. In other words, it is any tenement
included in the variation list.
l) Spot Value: Means the amount at which a scheduled tenement is ratable.
m) Rating Area: Means the area of operation of any rating authority. Every local government area is by
section 99 of the local government edict made a rating area.

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