Stamp duty when your business buys property
How stamp duty works when a Nigerian business buys land or a building, the NRS worked example, when a transfer is exempt, and how to book the cost.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
Buying premises is one of the largest decisions a Nigerian business makes. The price is negotiated for weeks, the lawyer checks the title, the bank arranges the finance. Stamp duty on the deed of transfer tends to be treated as one more line on the lawyer's bill, until it becomes clear that it is the buyer's duty, with a deadline, and that an unstamped deed is a poor document to rely on if the purchase is ever disputed.
This article explains how the NRS treats a transfer of property for stamp duty, who pays, the worked example in the NRS circular, the transfers that are exempt, the State question for land, and how to bring the duty into your fixed-asset records.
A transfer of property is a conveyance on sale
The NRS's Information Circular No. 2026/04, published on 29 June 2026, says a transfer of interest or rights in real property is subject to stamp duty as a conveyance on sale, payable by the transferee.
The transferee is the buyer. When your business buys, your business pays. PwC's summary of the Nigeria Tax Act agrees: the duty is payable by the transferee in a transfer of real property.
More broadly, the NRS says stamp duty applies to any instrument first executed in Nigeria, or executed outside Nigeria but relating to property situated in Nigeria or to anything done in Nigeria. A deed signed in London for a building in Abuja is still dutiable.
The NRS worked example
The circular's Illustration 4 applies ad valorem duty at 1.5% to land worth 15 million, giving duty of 225,000, payable by the transferee.
In words: the duty is a percentage of the property's value, and the buyer bears it. Use the illustration to understand the method, and confirm the rate for your transaction with your lawyer or tax adviser at the time of writing. The NRS sets out dutiable instruments, who pays, the deadline and the exemptions in its Information Circular on dutiable instruments.
When a transfer is exempt
The same paragraph of the circular sets out two exceptions:
- Low-value property. No duty where the property's value is N10,000,000 or less.
- Transfers within a group. No duty where the transfer is between associated companies holding at least 90% shareholding in each other, or through a third party, and the instrument was stamped when the property was initially purchased.
The group exemption has a condition that is easy to miss. It applies only if the property was stamped when the group first bought it. A group that moves property between companies to tidy its structure needs to find the original stamped deed first; without it, the exemption is in doubt.
The State question for land
The Lagos Internal Revenue Service's FAQs describe a split between levels of government: instruments executed between individuals and non-corporate entities are stamped by LIRS at State level, and instruments involving corporate bodies are stamped by the NRS at Federal level. The same FAQs add that stamp duty on a land transaction must be paid in the State where the land is located.
For a company buying land, those two statements point in different directions. Ask your lawyer which authority will stamp your deed before completion, and in which State, so that the duty is paid once, to the right place, within the deadline.
Thirty days, and the cost of missing them
The NRS says every instrument executed in Nigeria must be stamped not later than 30 days after its execution, by the person obligated to pay the duty. The LIRS FAQs say failing to stamp a dutiable instrument attracts a penalty of 10% of the unpaid stamp duty, plus interest at the Central Bank of Nigeria monetary policy rate.
On a property purchase, execution is the signing of the deed of transfer. Agree with your lawyer, in writing, who will take the deed for stamping and by what date.
Adding the duty to the asset's cost
The fixed-asset register. In Achekam, a fixed-asset register lets a business add assets at cost, depreciate them monthly by straight line or reducing balance with a journal each month, and dispose of them with the profit or loss posted. Tax wear-and-tear is not worked out, and the register is not part of Business Essentials.
Stamp duty and legal fees paid to acquire a property are usually part of what it cost to acquire. Agree with your accountant which costs belong in the asset's cost, how the price is split between land and building, and how each part is depreciated, then enter the asset at that total.
The journal. If the duty is paid separately from the purchase price, record it by manual journal with the stamping receipt as its reference. An unbalanced journal, or one dated in a closed month, is refused, and a posted journal is corrected only by reversing it.
The deed. Document Centre is a folder-based store where you upload, tag and search files, and a new version of a file keeps the earlier ones. Keep the stamped deed, the stamping receipt, the survey and the valuation in one folder for the property.
A property purchase checklist
- Confirm the property's value against the N10,000,000 exemption.
- For a group transfer, find the original stamped deed.
- Agree which authority stamps the deed, in which State.
- Diary the 30-day deadline from the date the deed is signed.
- Pay the duty and keep the receipt with the stamped deed.
- Add the duty to the asset's cost as your accountant advises.
- Keep the property file for as long as you own the property, and beyond.
Everyday contracts follow different rules; see stamping business contracts in Nigeria. For how long to keep the papers after you sell, read keeping Nigerian business records for six years.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
