Housing: Why Abuja Should Introduce ‘Ghost-Town Tax’ System

Housing: Why Abuja Should Introduce ‘Ghost-Town Tax’ System
July 30 21:14 2015 Print This Article

By Noel Onoja

Driving through the main by-pass in a  district presumed to be the area with the largest number of housing estates in Africa – Gwarinmpa-Abuja, an area that can boast of thousands of housing units most of which are uninhabited, same goes for plenty other buildings, properties and estates left unoccupied and rotting away for years in many other parts of the city.

It begins to beat your imagination starring at these properties that seem to me like white-elephants, most of them built for the upper-class people and highly unaffordable, and so they are left uninhabited with small shanties built usually at the back or around this huge estates by the very poor who cannot afford decent housing, many a time, I was told those houses are proceeds of stolen monies and money laundering and they are owned by top government officials and corrupt politicians.

Aside the fact that these abandoned properties in the areas that they occupy begin to damage the sense of community in such areas, prices of houses remains high and these unoccupied homes can force schools and private business in and around those areas to close up in atleast ten to fifteen years from now.

In this brief write-up, let us examine the necessity of putting in place legislation that will discourage this trend of ‘ghost-town-cities’ around the federal capital territory and also help Nigeria and Nigerians both investors and consumers to optimise all of the potentials and opportunities in the housing sector.

First, ‘Ghost town tax’ system is a tax policy whereby houses that are left uninhabited for certain number of years are taxed a certain amount by the government in order to encourage the utility and service of such houses to the people and this type of tax system is not a new type of law as it has been put to use in other parts of the world, for example, in the United Kingdom, the ghost town tax puts a fine of up to 50% of the value of the property as tax penalty for buildings unoccupied for a given period usually two years, and that policy has helped encourage usage and ownership of houses in the UK.

In Nigeria, the real housing issues resides with low income earners but most of the houses in abuja are design for high-end users and that makes it hard to meet prompt demand and there are no strong legislation to really regulate the activities of developers and investors in Abuja, save for the Abuja Property Tax bill which has been before the National Assembly since 2011 and that bill simply seeks to categorise houses into different categories in Abuja with a view of taxing them (with about 1%)accordingly; it will also be noteworthy for the NASS to also create a law as the ‘ghost town tax’ to help check and balance housing needs in the city.

The FCT is not operated as a state, everything that the FCT does is regulated through the NASS  unlike state were laws at such can be enacted at state level and also enforced almost immediately, in FCT such laws are meant to pass through the rigorous processes of the national assembly.

This ‘ghost town tax’ system will on the other hand help in generating more revenue for the government and so such laws should be backed up with strong and unfettered legislation with clear penalties for offenders as such laws will mostly be contending with the ‘high and mighty’  the laws should also be enforced in a way that it will compel the owner defaulters to pay; such laws will also discourage corruption, as people who think they can tie-down their stolen wealth in the property space will begin to reconsider, and morally speaking also, it makes no sense having plenty beautiful houses that could serve the people laying fallow and wasting away while a high percentage of ordinary Nigerians remain homeless.

If such laws are put in place, owners of such homes will be forced to put such properties to beneficial use, they will begin to consider building affordable housing for the low income earners, and may also adopt the Rent-To-Own approach so that people can encouraged to move into these homes. such laws will also discourage corruption, as people who think they can tie-down their stolen wealth in the property space will begin to reconsider.

The Rent-To-Own approach is a the process whereby tenants go into contractual agreement to take ownership of the house after paying rent for a certain period of time depending on the terms of agreement, what that means is that the rent you are paying for the house you occupy year in-year in is also computed as contributory payment for the same house so that after a long period you would have paid up fully and then own the house.

If the ghost town tax system is put in place a lot of housing issues will be dealt with in Abuja, prices will come down as developers and owners will bear in mind the consequences of building homes for ghosts. Civil servants, middle and low class earners will have their housing needs catered for and government will also do well complementing such policies with a good mortgage law so that Nigerians can be encouraged to own their own homes.  It will do good to both the landlord and the tenant.

Noel Onoja writes from Abuja, amgentmedia@gmail.com

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