CHAPTER ONE

1.0        INTRODUCTION

Property rating is a form of tax levied on real property and it is normally charged at local level for raising the revenue to carry out specific developmental projects. These rates are levied annually on owners or occupiers of landed property. It is charged on the annual value of occupation of the tenement and should reflect the income earning capacity of the built up landed property.  

            Historically, rating system has its origin in the Poor Relief Act, 1601 generally referred to in Britain as “the statute of Elizabeth”. This system inherited from Britain in 19th century has been recognized as a potentially rich source of raising fund within a Local Government Area for the purpose of providing and maintaining essential services and amenities in the rating area – such as roads, market squares, motor parks, communal halls are maintained through communal efforts. Individual in the community contribute their income and services for the up keep in their leaders’ household.

            It is the present day made of living and modernization that brought about the present sophistication and form of its application and collection. The local government now takes some of the roles formerly played by the Obas, Obis or Emirs which are presently more complicated like provision of electricity, schools, roads, clinics, refuse proposal services etc.

            The first real attempt to property rating was through the federal government guideline for local government reform of August, 1976. This document was designed to give guidelines on the structure, finance and administration of local government in the federation. The document introduced a pattern of rating law for the entire country and since then, all estate government have based their Rating Edict or Laws on it with very little modification. If is important to know that the major principles of the rating system in Nigeria is to defray the Local Government expenses. For example, that of Ogun state was called Tenement Rate Edict of 1995, where property types were zoned and appropriate unit was adopted. Thus the x – ray of the system in Nigeria was that of Tenement Rating, where value of the property for rating purpose is ascertained by a qualified estate surveyors and valuers and a percentage of the property is multiplied by a rate Nairrage to be adopted by the Rating Authority.

            Property Rating is a viable or stable source of revenue generation, though 70 – 80% of the total revenue to the local Government. In Nigeria is from the federal statutory allocation.

This Rating is a way of broadening the financial base of Local Government to provide necessary facilities for its subject.

Other source through which the Local Government can raise funds are, insurance of death and birth certificate, approval of plans, revenue from motor parks and market, insurance of license etc.

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