Embedding property tax in the social contract: the Lagos experience

Principal Investigator:

Tom Goodfellow


Oliver Owen (University of Oxford)


The potential of urban property taxation as a means to raise local government revenue, redistribute resources and strengthen the ‘fiscal contract’ has gained considerable attention in recent years - including with regard to Africa (Fjeldstad and Heggstad 2012; Monkam and Moore 2014). A number of ICTD research projects have explored the political obstacles to effective property taxation, which are multiple and formidable (Jibao and Pritchard 2013; 2015; Piracha and Moore 2015; Goodfellow 2015). This research has highlighted the nature and importance of elite resistance to the tax in different settings, and the problematic incentives facing tax collectors and administrators. In this respect, the political economy of property taxation and the challenges this can create for implementing reforms are increasingly widely appreciated. There remain, however, some relatively unexplored questions regarding how property tax – and the very conception of property on which this tax is based – is understood in different settings, and how popular ideas about the meaning of this tax affect compliance, perceptions of state legitimacy and ideas of citizenship.

In many African societies today, urban growth and expansion are transforming the way land is used and understood. At the same time, state-society relations are being constantly reconfigured by successive waves of governance reform and decentralisation, which layer onto precolonial and colonial legacies regarding both land and taxation that have become intertwined over time in complex and often poorly-understood ways. In such contexts, property taxation and its potential both to yield substantial revenue and produce socially equitable outcomes is not only dependent on patterns of property ownership and political resistance. It needs also to be understood in relation to normative and societally-specific conceptions about property and the relationship between property ownership, power and authority. In expanding African cities, control of land, and of revenues on land, are often constitutive of traditional political authority in ways which complicate state attempts to introduce more fully bureaucratised systems of revenue governance. For property tax to function sustainably over time in any city, some degree of acceptance and understanding of the tax is necessary not only among large property-owners but in society as a whole. In states considered relative ‘failures’ in property tax collection, it is apparent that lack of coherence between land laws and tax laws, and unsettled nature of ideas and understandings about the role of land and the purpose of the tax, are central to explaining that failure (Goodfellow 2015). Concomitantly, understanding relative ‘successes’ requires attention to social norms and beliefs about land, property and their relationship to authority.

Lagos is one of the few cities in Africa that has recently been celebrated for effective urban taxation, linked to wider governance reforms. This has attracted considerable interest. Yet while there has been substantial attention to the role of tax within this reform programme (Bodea and LeBas 2013; de Gramont 2015), little has been written about property tax specifically – despite the fact that property tax holds potential to be the most lucrative and progressive of urban taxes, especially in Africa’s largest city. Lagos’s real-estate sector is a destination for investment from both within and outside Nigeria, and constrained land availability reinforces this. More needs to be understood about the role of property taxation in the recent ‘success’ of Lagos, how efforts to reform property taxes since 2001 have interlinked with other aspects of reform in the same period, and how this affects attitudes to public authority. Understanding where property tax ‘fits in’ is especially important given the multiple (often informal) payments often made by city-dwellers to government, community and ‘traditional’ authorities in relation to the ownership and use of land. With landlordism playing a crucial role in the city’s economy, and land values and competition for land on the increase (bringing a rise in both slum demolitions and the reclamation of additional development land from the sea), understanding how the politics of urban land is interacting with tax reforms is crucial to understanding the sustainability and equitability of property taxation in the city.

Research questions

  • How effective has Lagos state been in raising property taxes relative to other forms of decentralised/state tax, and why?
  • What role have popular conceptions of land and property ownership played in shaping attitudes towards, and compliance with, property taxation?
  • How does payment of payment relate to other forms of payment relating to urban land use? Has property tax displaced any other transfers, and what are some of the social and political consequences of these changes?
  • How do changes in revenue governance impact patterns of political control which are in part dependent on control of land title and revenue?
  • How does the increased salience of property taxation in Lagos state affect peoples’ perception of themselves as citizens and of the legitimacy of the state?


Institute of Development Studies