Educational
What every Nigerian at home — and in the Diaspora — must know before they sign, pay, or build.
A Diaspora Cautionary Tale
Ufuoma had been saving for years while working in Dubai. She found a “sweet” plot in Lekki online and thought she’d secured a bargain. She wired the seller an upfront allocation fee, then paid for a surveyor and a builder — only to discover later she still needed governor’s consent, a long court search, and an unexpected infrastructure levy from the developer. The small “hidden” fees snowballed, and her savings were stretched thin. No one told her that were hidden costs to watch out for when buying properties in Nigeria. With better planning, a trusted agent and a 20% contingency fund, Ufuoma would have avoided stress and preserved cash for construction!
If you’re buying property in Nigeria — whether you’re in Lagos or abroad — Ufuoma’s story should be your wake-up call: the purchase price is only the beginning.
Why This Matters To You
Hidden costs can add 10%–40% (sometimes more) to your out-of-pocket total, delay your project, and expose you to legal risk. Understanding them upfront protects your money, timing, and long-term returns. So if you live abroad and desire to own a property in Nigeria, this article will show you all the hidden costs to watch out for when buying properties in Nigeria!
READ MORE: DIASPORA DOLLARS, REAL RISK: HOW TO AVOID LAND SCAMS IN NIGERIA!
The Full List — Hidden Costs Every Buyer Must Watch For
Below are the usual suspects and how they commonly show up. I list each cost, why it matters, who typically charges it, and how to manage or reduce it.
1) Agent / Finder’s Commission
- What it is: Fee paid to the estate agent or broker for sourcing the property.
- Why it matters: Often 2–7% of the sale price (varies by agreement). Can be added to your price unexpectedly.
- How to manage: Agree fees in writing before any viewing or negotiation. If you’re overseas, use an agent you’ve vetted and paid via escrow.
2) Legal Fees & Conveyancing Costs
- What it is: Lawyer fees to draft/pull title docs, carry out due diligence, draft the sale agreement, and handle registration.
- Why it matters: You need a lawyer to avoid title problems; cutting corners risks losing everything.
- How to manage: Request an itemized quote and scope of work. Use lawyers who specialize in property conveyancing and ask for references.
3) Title Searches / Land Registry & Search Fees
- What it is: Official searches at the state land registry, court checks for litigation, and search certificates.
- Why it matters: Proves whether a property has encumbrances or multiple claims. Missing this = high legal risk.
- How to manage: Don’t accept verbal assurances. Require registry certificates and copies of searches before payment.
4) Surveyor Fees & Revalidation of Survey Plans
- What it is: Professional survey to verify boundaries, peg positions, and area — and fees to update or revalidate old survey plans.
- Why it matters: Prevents double-sales; ensures you buy the plot you think you bought.
- How to manage: Always instruct an independent licensed surveyor; require a stamped survey plan as a condition of sale.
5) Governor’s Consent (where applicable) & Certificate Issuance Fees
- What it is: For certain transfers (e.g., from an individual), state law requires governor’s consent; this attracts processing fees and sometimes time.
- Why it matters: Transfers without proper consent can be voidable. It can be costly and time-consuming.
- How to manage: Confirm whether consent is required for your transaction and budget time and money for the process.
6) Stamp Duty & Registration Fees
- What it is: Government taxes on instruments and formal registration fees. Rates vary by state and document type.
- Why it matters: Stamp duty is legally required; an unstamped instrument may not be admissible in court. Registration legalizes ownership.
- How to manage: Ask your lawyer to calculate and include these in the closing budget; obtain official receipts.
7) Allocation fees, Development Levies & ‘Estate’ Charges (Developer Fees)
- What it is: Charges by developers for allocating a plot, and later charges for roadworks, drainage, gatehouses, or “facilities development”.
- Why it matters: Some developers bill major levies after allocation; ignore at your peril.
- How to manage: Get a full, written breakdown of developer fees before paying. Insist on escrow for major payments.
8) Service Charges / Estate Maintenance / Homeowners’ Association (HOA) Fees
- What it is: Recurring fees for security, road maintenance, landscaping and utilities in gated communities.
- Why it matters: These are recurring and impact your annual cost of ownership. Some estates charge upfront lump sums.
- How to manage: Clarify recurring amounts, billing frequency, and what they cover. Factor into long-term running costs.
9) Utility Connection Costs (Electricity, Water, Fiber)
- What it is: Meter installations, service connection fees from providers, or paying for trenching/connection work.
- Why it matters: These can be sizeable, especially for rural plots or new estates.
- How to manage: Ask the developer or local utility provider for connection quotes before you commit.
10) VAT on Materials, Contractor Bills & Building Permit Fees
- What it is: VAT on construction materials and services; permit fees for building plans and approvals.
- Why it matters: Construction is expensive; VAT and permit costs will increase your budget.
- How to manage: Budget for VAT and include it in construction quotes. Factor local planning and permit timelines into schedule.
11) Infrastructure / Impact Levies and Local Government Charges
- What it is: Town planning levies, drainage contributions or environmental levies assessed by local authorities.
- Why it matters: They can be demanded later as cities formalize services.
- How to manage: Confirm with the developer and local authority what levies exist and whether they’ve been paid.
12) Ground Rent or Customary Land Charges
- What it is: For certain customary lands, annual dues or payments to traditional rulers may be expected.
- Why it matters: These reappear annually and can cause tension if ignored.
- How to manage: Clarify any customary obligations with community leaders and put them in writing.
13) Mortgage / Loan Arrangement Fees, Valuation Fees and Insurance
- What it is: Bank processing fees, legal fees charged by lenders, valuation fees and life/home insurance.
- Why it matters: Borrowing costs add materially to loan TCO. Some banks charge non-refundable processing fees.
- How to manage: Shop lenders, compare fees, and get a full amortization schedule from the bank.
IN OTHER NEWS: How Real Estate Displaced Crude Oil as Nigeria’s Third Largest GDP Contributor
14) Exchange-rate Losses and Foreign Transfer Charges (for Diaspora)
- What it is: When sending funds from abroad you will pay FX spreads, bank charges and sometimes poor conversion rates.
- Why it matters: Can consume several percentage points of your transferred capital.
- How to manage: Use trusted remittance services, ask for Nigerian-naira invoices, and plan transfers when exchange rates are favorable.
15) Title Insurance (optional but useful)
- What it is: Insures against title defects, fraud, or title disputes that emerge after purchase.
- Why it matters: It’s an extra cost but can be a lifesaver if title risk is non-trivial.
- How to manage: Where available, compare policies and weigh cost vs. risk for high-value purchases.
16) Unexpected Construction Cost Overruns & Contingency
- What it is: Material price inflation, design changes, or site surprises (soil issues, remediation).
- Why it matters: Construction often exceeds budget. Unforeseen costs can derail projects.
- How to manage: Hold a contingency fund (10–25% common) and use fixed-price contracts where possible.
17) Taxes & Annual Property Rates (Local Government)
- What it is: Annual property tax/rates charged by local authorities; enforcement is rising in many urban areas.
- Why it matters: Recurring tax that affects holding cost and net returns.
- How to manage: Clarify tax obligations with local government and build into your cash flow.
So if you live abroad and desire to own a property in Nigeria, this article has shown you all there is to know about the hidden costs to watch out for when buying properties in Nigeria!
Practical checklist — Budget and Negotiation Steps (Use This Before You Sign Anything)
- Ask for a full cost breakdown (sale price + every fee).
- Confirm who pays what (seller vs buyer vs developer).
- Insist on original documents (C of O, survey plan, allocation letter).
- Order an independent survey and lawyer-conducted title search.
- Ask for escrow or lawyer trust account for all major payments.
- Check for developer levies and any post-allocation fees in writing.
- Plan a contingency of 10–25% of total budget.
- If abroad: use geo-tagged video, drone footage and a trusted on-the-ground rep.
- Get a signed receipt for every payment and official transaction evidence.
- Ask for copies of service charge agreements and estate rules.
How Following These Recommendations Benefits You
- Greater Certainty — no surprise fees after you commit.
- Legal Safety — fewer chances of losing your purchase to title defects.
- Better Returns — protecting capital increases your net ROI when you sell or rent.
- Peace of mind — you can invest from overseas without fear, using verifiable processes.
- Project success — fewer delays from unpaid levies, missing permits or misbudgeted builds.
In Conclusion
Buying property in Nigeria is one of the best ways to build wealth — but only when you plan for the full cost. Hidden fees don’t have to be a surprise. With the right lawyer, surveyor and trusted partner on the ground, you can invest confidently from anywhere in the world. So if you live abroad and desire to own a property in Nigeria, this article has shown you all the hidden costs to watch out for when buying properties in Nigeria!
If you want, House and Land Naija can:
- verify title documents on your behalf,
- arrange independent surveys and drone inspections,
- hold funds in escrow with a trusted lawyer, and
- provide an itemized closing budget so you know every naira you’ll need.
Let us help you buy smart and build your legacy.
Contact House and Land Naija to get a full purchase cost worksheet for any property you’re considering.
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