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ABSTRACT
This study has exhaustively analyzed the problems militating against effective property rating assessment and collection in Rivers State with particular reference to Port Harcourt Local Government Area. In order to achieve the prime purpose of the study, the researcher adopted simple random sampling technique in sourcing primary and secondary data from the respondents which include: property owners, (Rate payers), selected council staff and estate surveyors and valuers in the area of study. Simple tables, graphs, percentages and bar-charts have been used to analyze the empirical data that were obtained from the study. Major findings in the study include the absence of estate surveyors and valuers in the employment of the local government council; high cost of property rating administration; ignorance of the rate payer; lack of continuity of governance at the local government level, security challenges and mis-use of revenue realize from property rating assessment and collection in the area. Consequently, it has been recommended that professional estate surveyors and valuers be employed not only in Port Harcourt Local Government but all other councils in Rivers State; appropriate enlightenment campaign about relevance of property rating – training and re-training of local government staff; and ensuring adequate security of life and property are major solutions to address the problem of rating assessment and collection in the area. The study has been divided into 5 conventional chapters, namely chapter (1) which is the introduction, chapter (2) is the literature review chapter (3) is the research methodology, chapter (4) is data presentation analysis while chapter (5) is the summary of findings, recommendations and solution.
TABLE OF CONTENTS
Title page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi
list of tables viiii
List of figures………………………..…………………………………………………………..ix
CHAPTER ONE 1
Introduction 1
1.1 Background of the study……. 1
1.2` Statement of problem 3
1.3 Research question 4
1.4 Aim and objectives of the study 4
1.5 Scope of the study 5
1.6 Significance of the study 5
1.8 Limitations of the study 7
1.9 Definition of terms 8
CHAPTER TWO 11
Literature Review 11
2.1 Introduction 11
2.2 The historical development of property rating 11
2.3 Property rating system in Nigeria 13
2.4 Requirements of a good tenement rating system 13
2.5 Principles of property rating 15
2.6 Types of records used by rating authorities 16
2.7 Method of rating assessment 23
2.8 Property rating administration in Nigeria 27
2.9 Highlights of problems and prospect of property rating in Nigeria 29
2.9.1 Problems 29
2.9.2 Prospects 29
CHAPTER THREE 30
Research Methodology 30
3.1 Introduction 30
3.2 Data requirements and research design: 30
3.3 The study population 30
3.4 Sample frame and sample size 31
3.5 Methods of sampling techniques adopted 31
3.6 Methods of data collection 32
3.7 Methods of data analysis 33
CHAPTER FOUR 36
Presentation and analysis of data 36
4.1 Introduction 36
4.2 Analysis of questionnaire distribution and response rate 36
4.3 Analysis of data obtained from the responses to issues
raised in the questionnaire 37
4.3.1 Analyses of responses of property owners 37
4.3.2 Analysis of responses of council staff 40
4.3.3 Analysis of responses of selected estate surveyors 45
4.4 The socio-economic background of the respondents 46
Chapter Five 49
Summary Of Findings, Recommendations And Conclusions 49
5.1 Introduction 49
5.2 Summary of findings 49
5.3 Recommendations 50
5.4 Conclusion 51
References 53
Appendix 1 54
Appendix II 55
LIST OF TABLES
4.1: Analysis of questionnaire distributed and collected…………………………36
4.2: Types of properties owned by rate payers in Port Harcourt………….….…37
4.3: Rate liability of the building in the study area…………………………..……38
4.4: Yes or No option about the need for property rating ……………….….……38
4.5: Yes or No option on the judicious use of the proceeds
from rating …………………………………………………………….……………..39
4.6: Suggestions on the way forward ……………………….………………………..39
4.7: Yes or No responses on whether there has been rating
valuation exercise in Port Harcourt……………………..……………………….40
4.8: Mode of execution of rating valuation exercise in
Port Harcourt………………………………………………………….………………41
4.9: Presence of estate surveyor in the works department
of the council………………………………………………………………………….41
4.10: Ranking of amount of revenue collected from property rates…………..…42
4.11: Problems affecting property rating in Port Harcourt ……….…………….…43
4.12: Suggestion on the improvements of property rating in
Port Harcourt L.G.A………………………………………….….….……………….44
4.13: Showing Yes or No response ……………………………………..………………45
4.14: Showing problems affecting estate surveyors …………..…………….………45
4.15: Showing suggestions or solutions to the problems ……..…………………..46
LIST OF FIGURES
1 – Map of rivers State showing PHLGA…………………………….……………………7
2 – Use of bar charts and histograms ………………………..………………………..34
3 – Bar charts………………………………………….……………………………………..35
4 – Histograms…………………………………………………………………………………..35
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Rates are forms of taxation levied on the rate payer for the purpose of meeting expenses of a rating authority. Precepting authorities are authorities which by their nature have no right to levy rates or incur certain expenses in the interest of the society. Rates can either be general or special. The special rate takes the form of market and water rates etc, while the general rate covers the property in the purpose of rating valuation is to arrive at a figure termed the rateable value. Rates are levied on the rate payer who generally is the owner or occupier of the property, the property is assessed while payment is made by the occupier the landlord. Rate is annual levy on occupation of hereditament. Properties involved in rating valuation includes residential, Office, Shops, Industrial, Properties of public utilities and special properties such as; Hotels schools, filing stations etc. The rateable values of these properties bases for assessment.
Property rate is levied on occupation of property. This tax is not tied to the individual but to the landed property whether it is producing income or not. Property rate has been said to be a tax on occupation and usage. It is very surprising that most rating authorities in Nigeria still hold the property owner liable instead of the occupier who benefits from the occupation and use of the property.
Tenement rating covers the process of inspection, assessing, determining and levying of rates on properties within the Jurisdiction of the local government council. This whole process result in the levying of compulsory contribution by the local government authorities on owners of building s and other ratable hereditaments within the rating area.
This is done to raise revenue to the local government so that the necessary services and infrastructures can be provided for the benefits of the people who are resident within its area of jurisdiction. The local government is one of the three tiers of government in Nigeria. Like the other tiers of government, it has its functions and obligations to the people. The extent of executing these functions depends largely on the amount of revenue and other sources at the disposal of each of these local governments.
The 1979 constitution spelt out some of the main responsibilities of the local government which include: construction and maintenance of internal roads, tracks, drains, parks, convenience, refuse disposals, primary schools and healthcare services, etc. To carry out these and other functions, the local government authorities depend on the revenue allocation from the federal government and state government and possibly the internally generated revenue which may be raised from various, source depending on the nature and size of the councils, but usually the revenues emanates from licenses, local taxes, fine and rents, etc.
All the aforementioned sources of revenue to the local authority do not meet her financial requirements. Rating being a more reliable and regular source of local revenue, if well harnessed and organized, will from constant support base to the council. It is therefore the sole responsibility of every local authority to local inward and pursue internally generated revenue for her sustenance. Therefore, the more a local government is self sustaining, the better it is placed to carry out her functions to the public.
1.2` STATEMENT OF PROBLEM
Local Government Council as the third tier of government is expected to be autonomous, self sustaining and self reliant despite the statutory allocation due her from the state and Federal governments. Apart from funds from federal and state governments, local governments are expected to generate their own internal revenues. It is on record that in places, like America and Britain local authorities derives up to 50% of her finance from property rate.
Many local authorities, because of the inadequacy of their finances, rely solely on the federal and state governments. The area of operations, because of the problems poised by the collection of tenement rates as backed by the edict. It is for this reason that this research is being carried out, the research is aimed at finding out the various factors responsible for the problems of the collection of tenement rates in Port Harcourt local government area and possibly proffer solutions to them.
1.3 RESEARCH QUESTION
The following research questions have being put in place to sharpen the focus f the study.
1. What are the problems impeding tenement rate collection in the study area?
2. What factors contribute to these problems?
3. Does the non-collections of tenement rate have any
4. What is the local government area of study doing to to solve these problems?
5. What are the reactions of tenement rate payers towards the pattern of the collection of these rates?
6. Has the revenue generated from tenement been judiciously. Used to provide basic amenities to the people?
7. Was the rating administration done by a professional state surveyor and valuer?
1.4 AIM AND OBJECTIVES OF THE STUDY
The main aim of this study is to evaluate the problems and prospects of property rating assistance and collection in Rivers State with particular reference to Port Harcourt local government area.
1. To examine the methods of tenement rate assessment in the study area.
2. To examine the modality of tenement rate collection in the study area.
3. To determine the reasons for lack of proper tenement rates collection in the study area.
4. To ascertain whether professional estate surveyors and valuers were engaged?
1.5 SCOPE OF THE STUDY
The study centres only on the problems of tenement rate collection. The study is restricted to Port Harcourt local government area and the period under consideration is between 2012 to 2017.
1.6 SIGNIFICANCE OF THE STUDY
The people and inhabitants of Port Harcourt area require good roads, health care services, portable water, schools electricity security, etc. These goods and services will only be provided if the people are ready to support their provisions. Their support comes in when they pay their tenement rates.
With the dwindling of’ revenue from oil, there is need for the local Government to explore other sources of revenue generation and not solely rely on allocations from the federal Government and state government.
Tenement rating is a potential source of revenue to Local Governments. There is therefore need for the Local Government Area to explore this viable alternative source of revenue, hence the need for the study. The recommendations and suggestions will also improve the existing system of rating assessment and administration in the area.
THE STUDY AREA
The study area of this research is Port Harcourt local government area of Rivers State. It is the capital and administrative headquarters of Rivers State. The Port Harcourt Local Government Council Office is located at Emekalakale Street which originates from the Central Bank premises and terminates at the William Jumbo/Moscow road. The city of Port Harcourt has grown in leaps and bounds in terms of social, economic, political, administrative, institutional and religious activities. Thus, there is presently population explosion in the city resulting from the ingress or influx of people from the rural areas of the state to the city. There is also a remarkable migration of people from other states and cities to Port Harcourt. The Port Harcourt Local Government Area is bounded to the North, West, and South by Obio-Akpor and to the East by Okrika Local Government Areas respectively.
The map of Rivers State drawn below clearly shows the exact location of Port Harcourt City Local Government Area.
Fig. 1 – Map of Rivers State showing PHLGA
1.8 LIMITATIONS OF THE STUDY
Some constraints were encountered in carrying out the study and this acted as limitations to the research project. These include the following:
(i) Conservative and Non-Challent Aptitude of Respondents: The conservative and non-challant attitudes of the respondents, particularly staff of the chosen local government area. Their unwillingness to supply needed primary data caused some delay to this work.
(ii) Financial Problem: Project research of this nature is capital intensive as it involves acquisition of materials, photocopying, transportation typing and retyping of work already done. Thus, adequate finance was also the problem.
(iii) Lack of Relevant Materials: The fact also stands that not much had been written on the subject, thus it was difficult in sourcing relevant materials for review work. There was also the problem of inadequate textbooks in the school and departmental library on the subject of study it.
(iv) Lack of Sufficient Time: Moreover, most of the appointments made by some council executives concerning this research were not kept. The semester was more or less too short, the inclusion of project writing as a partial fulfillment of the award of Higher National Diploma degree, coupled with the already loaded academic work made the entire exercise a crash programme.
However inspite of these limitations, the project was result’ oriented in accordance with wish of God who also gave me life.
1.9 DEFINITION OF TERMS
For the purpose of clarity, it is necessary to identify some of the terms used in this project which include:
1.9 .1 HEREDITAMENT:
According to Oxford Advance Dictionary of current English, It is a property which is or may become liable to a rate being a unit of such property which is or would fall to be shown as a Separate item in the valuation work.
1.9.2 VALUATION LIST:
The valuation list has been described according to Udechukwu, CE (2006) as the authoritative and authentic records of hereditaments and assessments within a rating area.
1.9.3 TENEMENT:
A tenement is defined by Anya-Igwe K. (1998) as land and building which is held or occupied as a distinct or separate holding or tenancy or any wharf of pier hut does not include land without building.
1.9.4 OCCUPIER:
This means the person in occupation of the whole or part of such tenement, but does not include a lodger.
1.9.5 CAPITAL VALUE:
It means the price which a purchaser might reasonably be expected to give excluding and plant and machinery upon or in the tenement.
1.9.6 RATEABLE VALUE:
This is the value which the tenement is for the time being rated, it is also the assessed or annual value.
1.9.7 OWNER;
This includes the person for the time been receiving the rent of the tenement in connection with which the world is used whether on his own account or as agent or trustee for any person. Who would receive the same.
1.9.8 RATE:
These are forms of taxation levied on the rate payer for the purpose of meeting expenses of a rating authority.
1.9.9 ANALYSIS:
This is to evaluate or assess
1.9.10 PROBLEMS
These refers to impediments or difficulties encountered.
1.9.11 PROSPECTS
These are benefits or advantages arising from an action.
1.9.12 ASSESSMENT
To value a property for certain purposes such as rating.
1.9.13 COLLECTION
This refers to the process of acknowledging receipt of rates from the properties, situated in the rating area.
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