Published on and written by Cyril Jarnias
Buying real estate in Nigeria as a foreigner is possible, but it is neither simple nor quick. The market is promising, rental yields can be high, but the legal framework is very specific, the bureaucracy is heavy, and the risks of fraud are very real. Understanding the logic of the system—and its pitfalls—is essential before signing any contract or sending any wire transfer.
The process includes several key steps: choosing a suitable investment structure, complying with the Nigerian legal framework, obtaining the mandatory Governor’s Consent to finalize the acquisition, and managing applicable taxes. It is advisable to rely on common local market practices.
Understanding the Nigerian Legal Framework for Land Ownership
The starting point for any foreign investor is the Land Use Act of 1978. This law profoundly transformed how land ownership works in Nigeria and still conditions every real estate transaction today.
Before 1978, Nigeria allowed full ownership (freehold). The Land Use Act abolished this system, transferring the underlying ownership of all land in each State to the Governor, who administers it on behalf of the citizens. The State retains ultimate ownership and now only grants individuals and companies temporary occupancy rights in the form of leasehold, typically for a maximum term of 99 years.
For a foreigner, this has two major consequences. First, there is no perpetual land ownership in one’s own name. Second, any acquisition comes under the direct control of the Governor of the relevant State, who must give consent to most operations involving the transfer of rights.
In each State, this uniform foundation is supplemented by local laws, land registry regulations, environmental or urban planning laws. Lagos, Abuja, Port Harcourt, and other regional capitals have established more or less strict regimes to manage speculation and the arrival of foreign investors.
What Foreigners Are Allowed to Buy – and What Is Prohibited
The principle is clear: a foreigner cannot directly obtain a statutory or customary right of occupancy like a Nigerian citizen. Supreme Court case law reiterates that the benefits of the Land Use Act are primarily intended for Nigerians. In practice, this means a non-Nigerian cannot, in their own name, be granted a primary title to a plot of land.
To circumvent land acquisition restrictions for foreigners, Nigerian law allows the use of a locally incorporated company. Even if 100% owned by foreigners, this entity is considered a Nigerian legal person and can thus acquire land and buildings through long-term leases, like any local business.
In some states, particularly Lagos, specific laws—such as the Acquisition of Lands by Aliens Law (ALAL) or the Lagos State Real Estate Regulatory Authority Law of 2022—further restrict the duration of rights granted to foreigners, sometimes to a maximum of 25 years including renewal. Furthermore, these laws classify as an “alien” any company where the majority of the capital is held by non-Nigerians.
Beyond ownership rules, some geographical areas are anyway off-limits to foreigners, particularly near borders, military bases, or in specific strategic sectors, even though these restrictions are primarily managed by security regulations and not solely by land law.
The Most Common Structures Used by Foreigners to Invest
For the vast majority of foreign investors, the path therefore involves creating a Nigerian structure. The legislation (Companies and Allied Matters Act, NIPC Act) offers several options, but some are clearly more suited to real estate operations.
The Private Limited Liability Company
This is the most common vehicle for acquiring and holding real estate. A company of this type:
– can be 100% owned by foreigners;
– is registered with the Corporate Affairs Commission (CAC);
– has a separate legal personality that allows it to buy, hold, lease, and sell property.
The minimum legal share capital to create a company in Nigeria is 100,000 NGN.
Other Investment Vehicles
For institutional investors or funds, Nigeria also offers structures such as Real Estate Investment Trusts (REITs) or Real Estate Investment Companies (REICs), regulated by the Securities and Exchange Commission. These vehicles invest at least 70 to 75% of their assets in real estate and sometimes benefit from tax advantages, such as temporary corporate tax exemptions (Pioneer Status) if a substantial portion of rental income is redistributed.
Limited Liability Partnerships (LLPs) allow for structuring co-investments. Their main characteristic is taxation applied directly at the partner level, not at the structure itself.
In all cases, the first practical step for a foreigner often involves doing the following:
| Step | Main Actor | Estimated Timeline |
|---|---|---|
| Reserving the company name with the CAC | Lawyer / Promoter | 1–3 business days |
| Drafting the Articles of Association (Memorandum & Articles) | Lawyer | 3–5 days |
| Registering the company with the CAC | CAC | 5–7 business days |
| Obtaining the TIN and tax registration | FIRS / State | 3–10 days |
| Potential application for a Business Permit (if foreign participation) | Ministry of Interior | Variable |
Once the company is operational, it can sign sale contracts, hold the title at the land registry, and obtain loans from local banks.
Specifics of Acquisition by a Foreigner: Governor’s Consent and Authorizations
The central element of any real estate transaction in Nigeria is the Governor’s Consent. Provided for in Sections 21 and 22 of the Land Use Act, these provisions require that any alienation (sale, mortgage, assignment of lease, sublease, etc.) of an existing right of occupancy be approved in writing by the Governor of the State—or, for federal lands, by the competent Minister.
Rules applicable to domestic and foreign buyers, individuals or legal entities, for land acquisition.
The requirement applies in the same way to individuals or legal entities of Nigerian nationality.
For foreigners, a dedicated procedure is required in several states, which may include specific conditions and limitations.
The procedure may impose specific conditions, lease term limitations, and obligations to notify the State in case of resale.
Without this Governor’s Consent, the transfer is legally void. Even if a sale contract has been signed, the price paid, and the keys handed over, the transaction remains precarious until the consent has been registered at the land registry. The buyer then lacks full enforceability of their right, the ability to mortgage the property, and the guarantee of compensation in case of expropriation.
The Concrete Process of a Real Estate Purchase for a Foreigner
Once this framework is established, the purchase process follows relatively standard steps, but it is crucial to follow them scrupulously.
Property Search and Initial Analysis
Everything starts with identifying an opportunity: a villa in Lagos (Ikoyi, Victoria Island, Lekki), an apartment in Abuja (Maitama, Asokoro), land in Port Harcourt, or an office building in an emerging commercial area. The Nigerian market is vast, the real estate sector is the fifth-largest contributor to GDP, and the need for housing and commercial space is considerable, particularly due to the development of the tech sector (data centers, warehouses, offices).
At this stage, relying solely on an agent, an online ad, or photos is extremely risky. Using a lawyer specialized in real estate—registered with the Nigerian bar—is considered an essential investment. Their role from the outset is to filter dubious offers, verify the seller’s legal capacity, and initiate the first title searches.
Due Diligence: Mapping Risks Before Signing
Nigeria has a high prevalence of land fraud: multiple sales of the same plot, fake Certificates of Occupancy, inflated titles, lands located in a government acquisition zone, scams on “off-plan” projects never built, etc. The famous figure of the “Omo-Onile”—indigenous families or communities claiming customary rights—also illustrates the local complexity of some cases.
The due diligence conducted by the lawyer and, where applicable, by a surveyor and a technical expert, covers several areas.
Before any acquisition, two checks are crucial. First, consult the Land Registry to confirm the identity of the registered owner, check for encumbrances (mortgages, easements, leases, liens), and ensure the land is not under government acquisition. Second, for land, verify with the Surveyor General’s office the validity of the survey plan, the correspondence of coordinates, and the plot’s situation relative to reserved or non-buildable zones.
For properties from an estate, a search at the Probate Registry is necessary to ensure the validity of the letters of administration or grant of probate. For properties held by a company, a search at the Corporate Affairs Commission (CAC) reveals if the company has encumbrances or is subject to legal proceedings.
Next, a check at the Court Registry identifies any pending legal proceedings affecting the property: ownership dispute, boundary conflict, judicial seizure, etc. These documentary searches are complemented by a physical site inspection, ideal for spotting any signs of third-party occupation, squatters, or “adverse possession” (prolonged occupation that may, under the law of some states like Lagos, generate rights after 12 years).
Informal inquiries—discussions with neighbors, resident associations, community leaders—are often decisive in revealing family disputes, informal sale promises, or latent conflicts never registered at the cadastre.
Finally, a verification of the seller’s identity, legal capacity, and authority to dispose of the property is carried out: ID card or passport, articles of association, and board resolution for a company, verification of co-owners, spouses, or executors of an estate. All this is accompanied by a check of property charges and taxes (land use charges, property tax) to ensure no debts are attached to the property.
The Sale Contract and Transfer Documents
Once the due diligence is deemed satisfactory, the parties sign a sale contract (Sale and Purchase Agreement or Contract of Sale) which sets the price, exact description of the property, title history (root of title), payment method, transfer timelines, warranties given by the seller, and dispute resolution methods. The law does not impose warranties on the building’s condition: it is therefore up to the contract to stipulate compliance commitments and the buyer’s rights in case of hidden defects or non-conformity.
The transfer of rights is then effected via a Deed of Assignment (for an assignment) or a Deed of Lease/Sublease (for a long-term lease). These deeds must be drafted as deeds, signed by the parties and witnesses, and subsequently registered.
The main title documents that the buyer wants to have at the end of the process are: the title deeds, notarized acts, location certificates, and sale contracts.
| Document | Main Role |
|---|---|
| Certificate of Occupancy (C of O) | Primary occupancy title issued by the State to the initial allottee of “virgin” land |
| Deed of Assignment / Conveyance | Deed transferring rights from the existing owner to the buyer |
| Deed of Lease / Sublease | Lease or sublease deed for temporary rights |
| Survey Plan | Official survey plan indicating area, boundaries, and coordinates |
| Governor’s Consent | Mandatory Governor’s approval to validate the transfer of an existing title |
| Proof of payment of taxes and fees | Tax documentation required for registering the transfer |
A Power of Attorney may also be used when a local representative acts on behalf of a buyer based abroad, particularly to sign documents and follow registration procedures. However, this is an instrument to be used with caution, as it grants significant powers to an intermediary.
The Governor’s Consent: Legal Heart of the Transaction
From a practical standpoint, obtaining the Governor’s Consent generally occurs after signing the Deed of Assignment and paying the price. Yet, it is this step that truly transforms the sale into an enforceable right.
The assignment application must be submitted to the Ministry of Lands of the relevant State. The file must be complete and include: a consent form signed by the seller, copies of the deed of assignment, a certified true copy of the prior title (C of O or other registered document), a survey plan, proof of stamp duty payment, a property valuation report, as well as identification documents of the seller and buyer. For a company, the Certificate of Incorporation and a resolution authorizing the transaction must be attached.
The cadastral services then verify the plot’s situation, status, and any constraints or public projects. Once the review is completed, the Governor—or, more frequently, the Commissioner for Justice acting by delegation—places their signature and official seal on the transaction. The transfer is then registered in the deeds registry, with the assignment of a unique registration number.
Fees related to the Governor’s Consent generally range between 1.5% and 3% of the property’s value, to which may be added, when the assignment occurs within the first ten years following the issuance of the initial title by the State, an additional fee of about 1.5%.
Registration at the Land Registry and Finalization
The final link in the process is registering the transaction at the State land registry. Without this registration, the title remains vulnerable: a third party, in good faith, could claim a later registration and the buyer would have more difficulty asserting their rights, particularly in court.
Registration involves payment of stamp duties on the documents and registration fees, usually calculated as a percentage of the property’s value, in a range of 1.5% to 2%. Note that since the 2020 tax reform, the assignment of a “land interest” is exempt from VAT, but not from other taxes.
In practice, the entire journey—from the first property visit to the handover of a perfectly registered title—can take between 6 and 14 months, depending on the case’s complexity, the responsiveness of the administrations, and the quality of follow-up by the appointed professionals.
How Much Does an Acquisition Really Cost for a Foreigner?
Beyond the listed price of the land, apartment, or building, a foreign buyer must anticipate a set of fees and taxes, most of which are borne by the buyer in Nigerian practice.
The main cost items can be summarized as follows, for indicative purposes: the main cost items
| Cost Item | Indicative Rate | Borne by |
|---|---|---|
| Stamp Duty (on the deed) | Approximately 1.5–2% of value | Buyer |
| Governor’s Consent Fee | 1.5–3% of value | Buyer |
| Land Registry Registration Fees | 1–2% of value | Buyer |
| Capital Gains Tax (on capital gain) | 10% of capital gain | Seller (in theory) |
| Lawyer’s Fees | 1–2% of value | Buyer (often) |
| Real Estate Agent’s Fees | Negotiated percentage | Variable |
| Miscellaneous (searches, surveys, certified copies, etc.) | Fixed amount or lump sum | Buyer |
The Capital Gains Tax on the property transfer is, in principle, payable by the seller, at a rate of 10% on the capital gain realized. However, in practice, it is not uncommon for the buyer to absorb part of this impact through negotiation of the seller’s net price.
Some recent reforms—such as the Finance Act 2020 or the Nigeria Startup Act 2022—provide exemptions from Capital Gains Tax for transfers of assets within the same group or for investors selling a stake in a labeled startup after a certain holding period. But these mechanisms concern share transactions more than classic real estate acquisitions.
Finance Act 2020 and Nigeria Startup Act 2022
Regarding VAT, the rule is clear: the sale of an interest in land is exempt from Value Added Tax. However, associated services (architects, engineers, contractors, agencies) remain subject to VAT.
Financing the Purchase: Why Most Foreigners Pay Cash
Obtaining a local mortgage loan as a foreigner in Nigeria remains difficult. A few major banks—Guaranty Trust Bank, Zenith Bank, First Bank of Nigeria, Stanbic IBTC, UBA—have developed products targeting the diaspora or certain expatriates, but these financings remain the exception rather than the rule.
Real estate loans offered to non-Nigerians often come with:
Real estate acquisition in Nigeria is subject to rigorous financial conditions, including very high annual interest rates (16% to 22%), short maximum loan terms (15 to 20 years), and a significant initial deposit (30% to 50% of the price). It also requires stable and high income, sometimes in hard currency, opening a local bank account, and in some cases, providing a guarantor residing in Nigeria.
Given these constraints, most foreign purchases are made in cash, sometimes supplemented by staggered payment plans offered by developers (developer payment plans) or by financing obtained in the investor’s home country.
Specific Risks Foreigners Must Face
The Nigerian market can offer gross yields of 6 to 12% in prime neighborhoods, and up to 14–17% in certain niche segments, with annual capital appreciation prospects of 10 to 25% depending on the area. But this attractiveness comes with significant risks, especially for buyers geographically distant and less familiar with local practices.
Documented cases of fraud include double-selling of land by unscrupulous sellers, use of fake survey plans or falsified Certificates of Occupancy, marketing of land located in government acquisition zones, or real estate programs launched off-plan and never built.
Real estate transactions in Nigeria are exposed to frequent disputes with local communities (Omo-Onile), including ancestral claims, demands for illegitimate fees, and pressure on buyers. Furthermore, the sale of “family land” without a formal will is very fragile if all heirs have not consented to the transaction, due to the complexity of the inheritance system.
In this context, the recommendation is constant: never rush, refuse any scheme that bypasses due diligence, advise against paying large deposits before confirming the title at the land registry, and favor payments to duly registered corporate bank accounts.
The Central Role of the Real Estate Specialized Lawyer
In such a risky environment, using a lawyer specialized in real estate law is not an option, but a basic precaution. This professional handles title verification, drafting and negotiating contracts, managing procedures with the Land Registry, Ministry of Lands, CAC, and the tax administration.
Their missions cover, in particular: the areas of education, health, environment, culture, and economic development.
– conducting land and legal searches (Land Registry, Surveyor General, Probate Registry, Court Registry, CAC);
– analyzing title documents presented by the seller and reconstructing the chain of title;
– assessing legal risks (easements, litigation, government acquisitions, non-compliance with urban planning or environmental regulations);
– drafting transfer deeds (Deed of Assignment, Deed of Lease) and the sale contract;
– assisting in obtaining the Governor’s Consent and paying Stamp Duties and other taxes;
– coordinating with technical experts (surveyors, engineers, architects) for technical due diligence;
– representation in case of post-acquisition dispute.
The fees for such a professional are usually between 1 and 2% of the property’s value, or in a range of 300,000 to 1,000,000 NGN depending on the type of transaction. Compared to amounts lost in many fraud or land dispute cases, these costs are generally modest.
Environmental and Urban Planning Obligations
Buying land does not give carte blanche to build anything, anywhere. Two major laws complement the Land Use Act on this ground: the Environmental Impact Assessment Act and the Nigerian Urban and Regional Planning Act.
For complex projects (residential, offices, factories), an environmental impact assessment report is mandatory to assess risks of pollution, soil degradation, or nuisance for neighboring communities. Owners, tenants, and occupants are legally responsible for the sanitation of their premises. Federal and state laws provide for penalties in case of environmental damage.
Furthermore, the permitted use of a plot (residential, commercial, industrial, mixed) is generally indicated in the titles or land certificates. In case of doubt, the buyer can request Planning Information from the State urban planning office to ensure their project—residence, hotel, shopping center, warehouse—is compatible with applicable zoning.
Building a residential building on a plot intended for industrial use exposes one to permit refusals, or even demolitions. Here again, the intervention of a lawyer and a local urban planner is crucial upfront.
State Intervention and the Question of Expropriation
As all land is, in law, held in trust by the Governors, the State retains a strong power to take back land for public purpose. The Land Use Act thus authorizes the Governor to proceed with compulsory acquisition for a superior public interest objective—road infrastructure, public facility, urban planning operations—in exchange for “fair and reasonable” compensation based on replacement cost.
The revocation of a right of occupancy by the State is not reserved for foreigners alone; it applies to any holder, Nigerian or not. It can occur before the scheduled term in case of serious breach of conditions, such as prolonged non-payment of ground rents or a flagrant violation of urban planning rules.
For a foreign investor, this highlights the importance of:
– acquiring properties with a clear and regularly renewed title;
– remaining compliant with all land charges and regulatory fees;
– avoiding high-risk areas, identified as subject to major infrastructure projects without a clear relocation plan.
In parallel, the Nigerian Investment Promotion Commission, via the NIPC Act, guarantees foreign investors that their enterprises will not be nationalized or expropriated without fair compensation and the possibility of recourse. These protections mainly concern shareholdings in companies, but they overall reinforce the legal security of real estate investment when housed in a corporate structure.
An Attractive but Demanding Market: How to Approach Investment
Overall, Nigeria remains an attractive real estate market for foreigners. Major cities—Lagos, Abuja, Port Harcourt—concentrate the bulk of flows, with prime neighborhoods like Ikoyi, Victoria Island, or Lekki in Lagos, or Maitama and Asokoro in Abuja, where land prices can exceed several hundred million naira and rental yields remain competitive compared to other African markets.
But this appeal must never make one forget the specificity of the Nigerian framework: a leasehold-type property right, the impossibility for a foreign individual to become a direct holder of a right of occupancy, the necessity of Governor’s Consent for any transfer, the complexity of the cadastre, the scarcity of title insurance, the prevalence of fraud risks, and bureaucratic heaviness.
To navigate this landscape, a few structuring principles emerge:
– invest through a Nigerian law company, properly constituted and registered;
– surround yourself with a specialized lawyer, a licensed surveyor, and if needed, a technical expert;
– systematize legal, land, social, and technical due diligence before any significant payment;
– demand and retain all documents—C of O, Deed of Assignment, survey plan, Governor’s Consent, proof of payment of taxes and fees;
– refuse administrative shortcuts or pressure to “go fast” at the expense of verifications.
For the foreigner who accepts these constraints and adopts this discipline, the Nigerian real estate market can offer real opportunities for diversification and yield, in a country where demographics and urbanization support sustained demand for housing and professional real estate assets.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
