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This initiative aims to discuss property rates as a source of revenue for local governments. It is focused on the Oru-West Local Government Area of Imo State. Property rating, often known as tenement rating, is a tax placed on the owners of rateable properties. The history of property grading in Nigeria Local Government is traced in this study.

It defines several fundamental terms. The objectives of property grading in Nigerian local government cannot be overstated. According to the obligations and works assigned to the local government authority,

they engage in tenement rating with the goal of obtaining the following: increasing local government revenue, providing the poor with necessary facilities, encouraging building owners to develop them, development of the council unit, and the purchase of large machines.

Rating has been used to inhibit urban decline by providing an answer to the basic question of how to organise cities. According to Oru-West Local Government, several houses have been demolished and new ones built as a result of the effects of excessive taxation on such assets.

Although rating has been identified as the best method of obtaining funds, some issues, such as a lack of personality, abilities, and necessary equipment, which are covered in depth in chapter four of this project, have been disrupting the free flow of rationing in our economy.


Property rating, also known as tenement rating, is the rate or tax charged on the owners or occupiers of rateable properties or tenements. It is a type of tax or rate charged on properties that are not owned by the government or the public. Rates from the local government’s primary source of revenue.

Tenement rating was not known until 1601 when the United Kingdom introduced the poor relief fund gradually, the property rating began to gain ground in nations and especially Nigeria local government

authorities which is now a great source of the local government’s finanace not only for the development of their areas of jurisdiction but also to maintain these places e.g. Oru – West local government is one.

Prior to the introduction or rating, the local government realised funds from grants from the state and federal governments, borrowing from banks, agriculture, and other means. The truth is that the funds available to the government at the time were insufficient to run their departments.

They were looking for ways to collect appropriate money, and with the establishment of property rating, the government now has additional means of getting money.

The goal of instituting property rating is to provide appropriate revenue to local governments for use in providing all necessary infrastructure such as piped water, power, access roads, good streets, and so on for the use of both poor and rich people.

However, with rate taxation, the quantity of money required is quickly determined, and the overall liability is then allocated among tax payers or rate payers. The tax amount is determined by dividing the amount to be raised by the aggregate rateable value. The rateable value of land and buildings is used to calculate the property rate.

According to the records, a small amount of money was made via tenement rating in Oru-West local government, Imo state. This aided them more than the agriculture industry and other sectors in the area; so, ranking is of critical importance to the world, and particularly to Nigerian local governments.

1.2 Oru-West Local Government Area’s Historical Background

The Oru-West local government was formed in 1996 from the original Oru local government. It consists of 10 towns: Ohakpu, Eleh, Aji, Nempi, Ozara, Otulu, Ubulu, Amaofu, Ibiasoegbe, and Mgbidi, the administrative centre of the Oru-West local government region.

It has a total area of twenty-five kilometres and a population of approximately 1.4 million people. The majority of the people are villagers and farmers. Eleh people, for example, are known for cassava production, Otulu for palm tree and plantain plantation,

Mgbidi for poultry keeping, Aji for yam production, Ibiasoegbe for livestock keeping and management, and Ozara for fishing due to the large lake in their town.

The Mgbidi local government council headquarters was erected and furnished with funds collected by property grading in the area.


Property rating is not a new concept in Nigeria. There were extremely few in the public sector. Nonetheless, highways, market places, chiefs’ palaces, and meeting squares were built and maintained through communal labour,

which meant that members of the community donated their quota of crops and services to the upkeep and maintenance of all these amenities. These contributions were essentially rates.

Nigeria’s rating system is based on British laws. The rating system in the United Kingdom began with the Poor Relief Act of 1601 which called for the imposition of a tax on all owners of land, homes, and other property in order to aid the poor. This is known as the Statute of Elizabeth of England.

Property rating was first incorporated into Nigerian law in 1915, and this law established property rating as a source of local government financing. By 1958, the 1915 regulation had been changed and amended to form the Nigerian and Lagos assessment ordinance caps 15 and 16. When the head of state, General Mohammed, took office in 1975,

there was a local government reform, which meant that the numerous local government Edicts were issued, which transformed the property rating system. The various states were given the authority to adopt local government edicts, which are now rating the legal support with which it works in Oru-West local government Area, Imo state.


Information was gathered from records referring to property rating in the local government secretariat, journals, oral interviews, lectures offered on property rating in the department of Estate management, and discussions/interviews, as well as text books and project work.


Some of the words linked with ratin can be found in discussions of property rating as a source of local government revenue. First and foremost, consider ranking.

RATING: This is defined as the imposition of taxes on the use, occupation, and ownership of landed assets in order to fund the provision of services by the local government, which is the third tier of government in their areas of jurisdiction.

PROPERTY RATING: This is a type of taxation; it can be a levy or tax on the head of any taxable adult who dwells or works within a local government area, i.e. tenement rating, or it can be a levy or tax on the head of any taxable adult who resides or works within a local government area, i.e. capitation rate.

However, property rating is the rate or tax levied on the owners or occupiers of retable properties or tenements. The main source of internal revenue for the local government is rates.

RATEABLE VALUE: This is the amount of money on which the rate of nairage is applied after deducting outgoings and decapitalization amounts from the money. For example, suppose a lessor receives N1000 in rent. He will then deduct the outgoings, and the rate officers will decapitalize the amount by 5%. The remaining money is the rateable value.

RATE NAIRAGE: The amount per naira payable by the relevant erating authority as the rate on the net yearly value or rateable worth of a property or heeditament in a specific year.

This is established by calculating the entire estimated expenditure and dividing it by the total ratable value of rateable properties or herditaments in the rate nairage.

TENEMENT: This term refers to land with a building that is used or occupied as a distinct or separate tenancy or any pier, but it does not include property without a building.

HEREDITAMENT: A herditament is a property that is subject to taxation and is represented in the production as a separate item. It includes all physical land and structures. It is also the right or interest in a reatable property unit. In terms of rating, hereditament might be physical or non-physical.

DECAPITALIZATION: This is the act of applying the decapitalize value, say, 5%, as determined by the government, in order to derive the rateable value. In Nigeria, the decapilized sum is calculated at 5%.

The goal of decapitalization is to determine the amount that will be paid in interest. The value obtained is referred to as the decapitalized value.

GROSS VALUE: This is the rent that a hereditament could reasonably be expected to command from year to year if the tenant agreed to pay all usual tenants rates and taxes and the landlord agreed to bear the cost of repairs and insurance, as well as any other expenses required to keep the hereditament in a state to command that rent on the property.

NET ANNUAL VALUE: This is the rent at which it is estimated that the hereditament could reasonably be expected to let from year to year, if the tenant agreed to pay all, usually tenant’s rates and taxes, as well as the cost of repairs, insurance, and other expenses, if any, to keep the hereditament in a state to command that rent.

ASSESSED VVALUE: The assessed value is the value at which the tenement is being assessed for the time being in line with the order made under Section 106.

SCHEDULED TENEMENT: A tenement in any of the state’s local government areas.

RENTAL VALUE: In the case of controlled properties, this is defined as the open market rent paid or payable from year to year in respect of the tenement in question, or as established by analysis and comparison of the general level of rent actually paid for that class of tenement in that area of locality.

RATEABLE OCCUPIER: It is difficult to provide a precise and full definition of the term “occupier”; occupation includes possession as a basic ingredient, but it also includes something else; legal possession does not constitute an occupation in and of itself.

However, the owner of an empty house is in possession and may sue anyone who enters it for trespass, but as long as he leaves it vacant, he is not rateable for it as an occupier.

If, on the other hand, he furnishes it and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, even if he only lives in it one day a year.

On the other hand, an occupier is someone who, without having any title, takes real possession of a house or piece of land, whether by leae of the owner or against his will.

Permanence is another essential component of occupation. An occupier of the structure could be an itinerant showman who erects a temporary structure for his performance.

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