An Evaluation Of Property Rating Practice In Nigeria (A Case Study Of Enugu North Local Government Area)

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An Evaluation Of Property Rating Practice In Nigeria (A Case Study Of Enugu North Local Government Area)


In writing this thesis, I have been afforded an opportunity to put in writing my views about An Evaluation Of Property Rating Practice In Nigeria (A Case Study Of Enugu North Local Government Area) of Enugu State.

This thesis has been planned in such a logistic and sequential pattern to give the reader a general clue of property rating practice and how it operates Enugu North local government area particularly.

Chapter One:

This captioned the Introduction. The particular chapter gives the overview of the whole paper ie. What the reader is expected to arrive at after reading the entire essay.

Chapter Two:

This dealt with a review of related literature in property Rating; Tenement Rating Assessment; method of rating valuation; Appeal machinery and their procedures.

Chapter Three:

Examined the Research methodology and design. Also presentation and analysis of data used in this research work.

Chapter four:

Focus on the history of the case study and problems and constraints of property rating in the case study area.

Chapter Five:

Finally chapter five presents the findings, recommendations and conclusions. The researchers perspective from findings, The recommendation is for future prospects of property Rating in Enugu North Local Government Area of Enugu State in particular and conclusion is for the entire paper.

Chapter One


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.

1.1 Background of Study

From investigation and empirical data on property rating in general and in Enugu state in particular, one observes a gold mine with proper handling waiting to be exploited as can seen in Enugu north it is, 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.

1.2 Statement of the Problem

The local government reform law gave the function of rate collection to the local authorities. The valuation unit in the old Anambra State 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 1978/79 in the whole of Enugu north 21% of the estimated rate revenue was collected. Some rating authorities are now embarking on a commission basis.

The question of prosecuting defaulters is not actively pursued in most local rating authority areas for two reasons:

  1. Most of the defaulters are the élites who will adjudicate such cases.
  2. For political expediency landlords are political power brokers who chairmen of local rating authorities would not like to embarrass by prosecution.

Part xiii of this Edict captioned “Rating” which includes sections 103 to 146 empowers a local government area, in other words, a rating areas to impose property rating on property owners as a source of revenue raising. In Enugu state in general, and Enugu North local government in particular, weaknesses are readily discernible in the present property rating structures which in retrospect, prevents successful implementation of their service. Most of the property rating administrators at the local government headquarters is mere technicians, others basely literate which in no less measure hamper their sense of judgments as per the nature of the properties they collect data from, to be used by the rating valuers in the ministry of local government as Enugu, to arrive at the annual values of the properties. This problem was aggravated during the political era when employment opportunities were nation on political rather than qualification basis.

In collation with this, most property owners in Enugu 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 for 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.

Local government provides essential services such as the supply of water and electricity, repair of wads and bridge, supplementing of the government grant for the payment of staff salaries not employed by the government. They also, have the responsibility to provide good drainage system and the planning of their local government area.

It is a fact that no government could long exist without the power to levy and collect taxes.(Barlowe.R)goes on to contend that the power to tax is the one great power upon which the whole national fabric is based. It is necessary to the existence and prosperity of the nation as the air he breathes is to the natural man. Thus the taxing power provides government with the major portion of revenues they use to finance their many operations and function, and it also provides a tool they can use for various fiscal and regulatory purposes.

1.4 Scope and Limitation of the Study

This work can not be said to be a comprehensive work. This is because property rating is so wide a discourse that all its facets could not, within the time limit and the volume margin, be covered effectively.

Coupled with these constraints aforementioned, the Enugu State North L.G.A played a vital role in frustrating the researchers endeavours. Again, the notion of administrators that the documents relating to property rating were mainly secrets and could not be made available to researchers unless on government permission met with its own problem.

Further more, reluctance due to ignorance on the purpose of the research on the part of the property owners to disclose necessary information on their own parts of the administration was also there. This was so pronominal that most of them either refused the collection and filling in of the questionnaires or automatically dodged certain personal interview question.

Despite all these constraints, and with perseverance and strong commitments, to the task on hand, the researcher was able to break through, and gathered adequate data necessary to make objective deduction and generalization on the property rating administration in Enugu North Local Government Area, Enugu State.

1.5 Definition of Important Terms

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.


Payment for the ownership or occupation of something valuable, that is, rate is payment for the benefit derived or derivable from services.


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.

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.

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.

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.


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.


The meaning of property varies not only among individuals but also among professions. T o 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 posses. These rights are

  1. Rights of use (b) Right of ahenate
  2. Right to claim title to (d) Right of assimilate, and (e) Right to pass by succession. These rights are referred to as “bundle of right” or property power.
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.


State here means Enugu State.

Local Government:

“local government” where used in this thesis implies the Enugu North Local Government Area of Enugu State.
APPRAISER: In relation to rating is essentially a valuer appointed to assess the value of hereditaments in the rating authority area.


Means any land, tenement or property which are or may become hable 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.

Spot Value:

Means the amount at which a scheduled tenement is ratable.

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.

Chapter Five

5.0 Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

The major objective of this study has been towards an improved tenement mating practice in Nigeria with particular focus on Enugu North Local Government Area.

This study was able to evaluate property rating administration in the study area and discovered the following.

  1. That before the recent call for proposals in the year 2000 from independence estate surveyors and valuers of revaluation of hereditaments for purpose of property rating and which contracted the services of EMMA EZE and Company; FRANK MALUZE AND ASSOCIATES, IFEANY EMOH AND COMPANY AND MEZUE ASSOCIATES rating has  been carried out only once in Enugu North Local Government Area.

The 1992 rating valuation was awarded with bias in return of a pledge for political reasons. Therefore it lacked good comprehensive accurate and good presentation of tenements were not covered and most of the fund were diverted to private coffers either personally or in collaboration with the local government staff. The exercises was also carried out by contracted independent Estate Surveyor and valuers.

  1. That there is a serious lack of professional manpower in the local government council hence, the resort to contracting independent Estate Surveyors and valuers for tenement rate Valuation / Assessment. Both the valuation and rating units of the Local Government Authority are not managed by professionals (Estate Surveyors). The highest sound person ever posted to man these units is an Ordinary National Diploma (OND) Certificate holder.
  2. That the property rate collection machinery of the study area is grossly inadequate resulting from lack of skilled labour in the local government council and the people’s attitude to work.
  3. That there is a low or inadequate provision of infrastructural facilities to compensate for rate payment.
  4. Other problems identified by the study included logistics (shortage or lack or vehicles, office equipment and field equipment), lack of funds and above all greed / corruption.
  5. The study however, found out that property rating is a veritable source of local government revenue in Nigeria, except that, its potentials are yet untapped in the vary area.

Thus, rural based local government can meaningfully embark on tenement rating as the militating problems are surmountable and bearing that the4re is no legislation prohibiting the conduct or property rating by rural based local government. Except that the councils depended largely on federal / statutory allocations.

There are other known viable sources of revenue generation, which include property rate.

5.2 Recommendation

Having analyzed the present state of tenement rating practice in Enugu North Local Government Area and result determined the study hereby make the following recommendations which are believed to be solution towards improving tenement rating practice in Enugu North in particular and Nigeria generally,

The paramount problem facing tenement rating in Enugu North is lack of skilled (professional) manpower to man the valuation and Rating units. This is the root of all other problems identified. It is the known fact  that  the problem half solved. Therefore if property rating must be relied on as variable means of revenue to the local government, professional Estate Surveyors or land officers should be employed to manage the Estate department of the council. This will solve the problem of contracting independent Estate firms for purpose of valuation assessment as well as take care of the rate collect ion machinery.

Greed/corruption is another serious cancer warm which has almost engulfed every Nigeria. Otherwise there should be no issue of lack of fund in the local government council. At least, little fund which can be employed in carrying out property rating especially knowing that such funds if employed will yield returns (investments). In this regards therefore  individuals and government alike should endevour to embark on self denial personal sacrifice and tolerance. Without which the issue of greed corruption cannot be stamped out. If these is done, one will discover that there  is enough funds in the local government council such that can provide for the execution of not only rating practice but as well take care of the problems of shortage of skilled manpower, lack of funds, logistics, and the problem of inadequate social / infrastructural facilities.

Incentives by way of prompt payment of salaries, allowance and the due promotion should be provided to workers of the local government which include the revenue collectors. Also special merit awards should be given to best revenue collectors of each year. This will not only help increase the morale of the workers but will as well, checkmate fraudulent practices.

The ideal of centralising valuation is a commendable one. However, this does not mean that a qualified valuer cannot be attached to the rating authorities. Therefore I am suggesting that at least one qualified valuer be attached to each authority operating property rating to listen to the people and advice them on rating assessment problems. This will go a long way to prevent unnecessary objections and consequent late payment of rates.

The importance of staff motivation should not be over – looked. Poor working conditions can be frustrating. Adequate transport facilities should be provided as and when needed. This can be achieved by assigning vehicles to the rating units of the local government areas on a permanent basis.

Still on the question of staff motivation, I suggest that the officers of the local government authorities should be made more comfortable.

The near  – shabbiness and scantiness of the offices of the various local government offices that I visited are nothing to write home about. No wonder young graduates shrink away from the prospect of working there. These offices should be made comfortable enough to compete favourably with other arms of the government ministries.

To go into the field for assessment of tenement requires more than transportation. During raining seasons movement especially tot he rural ratable area is heavily curtailed. For an effective yearly performance, staff should be posted there with uniforms rain coats and rain boots.

Also the importance of property rating should be communicated to property owners. They should be made to see payment of property rates as much of a civil responsibility like other forms of tax. This can be done by announcements over the wireless, T.V, dailies etc. This will bring the importance of property rating home to rate payers in particular and society at large.

The local government council should establish estate departments manned by professional rather than farming out jobs to professional estate surveyors. Workshops, seminars and training should be organised regularly for the staff of the assessment and valuation sections. The civil services should be made more attractive in the are of remuneration. An officer who is adequately paid is likely to resist any sort of temptation from a delinquent tenement owner.

Introduction of computer technology will also help in many ways to identify problems associated with under assessment. There should be constant public enlightenment so that the public can realize the benefits accruing to them from payments of rates. This can be done by means of public enlightenment programmes on television and radio. The notice of valuation be sent out early enough so that property owners are notified of rates due on their property. A sustained effort at identifying is required. Defaults should be persecuted. So as to act as a deterrent to others.  The punishment that is given to the defaults should be such that would constitute sufficient deterrence and it should be possible to sell the property of a defaulter to enforce compliance.

The remedy for non-payment should be a criminal one. it is now trite that payment of rates is an involuntary payment. Even where there is a demand owner do not pay if they know that big so doing they have nothing to loose. Instead of mere admonition of defaults. The sharp edge of the law should be brought to bear on these defaults. If the law prescribes a term of imprisonment for non- payment of rates; then it would definitely deter others. Again local government council should establish enforcement department to be manned by lawyers and it will make more effective.

5.2 Conclusion

Tenement rating as a source of revenue possesses numerous advantages and potential for  revenue generation for local governments authorities. Its full potentials are yet to be realized in the study area. this is owing to the adhoc and half hazard application of the system. Various draw back constraints relating to social, political, economic legal and organizational state of national and local development have stunted its efficient operational development and growth.

These problems are not insurmountable and a lot can be achieved given the political will.

The current yields from property rates reflect failures in the administration of the tax. As in the case with many local governments, valuation lists are out dated and collection efficacy extremely poor. This is where it is incumbent on the rating Authorities to enlist the services of qualified Estate Surveyors and valuers both in their Rating department, as Rating staff and qualified Estate firms as appraisers to handle the Assessment and collection of rates.

The organization of tenement rating is it special undertaking requiring the professional expertise experience and knowledge of the Estate Surveyor and valuer. The role of the surveyors, however should not be limited to canvassing for assessment and valuation jobs from rating Authorities, it should involved making government and the community aware of the immense possibilities and gains of this form of taxation.

Property rates are important and variable source of Revenue to local government. Particularly now that emphasis is on Revenue from local source to enable the chairmen of local government councils and their elected councilors to provide the much talked about “Democracy dividends” as well as bridge the problem or issue of zero allocation.

From Research Question 3, revealed a gross inadequate property Rate collection machinery in the study area. This shows the fact that there are barriers to the effective rate collection machinery which as revealed by table 3.6.3 include administrative lapses, logistics problem, and greed corruption which is most pronounced. These problems further degenerated to the extent that the revenue realized from property rate collection is not judiciously utilized.

This is so noted because the compensation to property owners/landlords for the rates t hey pay, is the provision of adequate infrastructural facilities such as good network or roads, water supply, electricity amongst others. There is lack of infrastructural facilities while table 3.6.4 noted that the level of available social / infrastructral facilities in the study area is not satisfactory.

Generally however table above revealed a myriad of problem facing tenement rating practice in the study area. These include: administrative lapses, shortage of funds, shortage of skilled manpower, lack of infrastructural logistic and corruption. The most severe of the problems is shortage of skilled manpower (55.71%). This confirms why the local government contracts valuation / Assessment of property for rating purposes to external bodies.

This rather results in more lost of funds than the cry of lack of funds.

For the local government to contract property Rate Assessment confirms lack or absolutely shortage of professional manpower in the local government council. This was confirmed by 88.57% of the target population.

When asked of the level of performance of Valuation / Assessment of property by contracting the table 3.6 revealed (88.57%) confirming satisfactory. Although many cry for contracting it out but for the fact that the council engaging external bodies. They assume that was since they cannot do themselves undertake the exercise nor do they know fully what is entailed in rating assessment.

Provision of social / infrastructural facilities in any community is a major compensation to the people who pay taxes and other levies to governments.

These suggestions and recommendation made in this paper, believed, provides a starting point. Mineral oil is a wasting asset. So retime in the life of our nation, the trillion dollar revenue from oil may dry up. What do we, and generation yet unborn, fail back to? For local authorities tenement rating makes the answer.

An Evaluation Of Property Rating Practice In Nigeria (A Case Study Of Enugu North Local Government Area)

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