true lease
True Lease is a rental deal where the landlord keeps real ownership of the property and its tax perks, while the tenant simply pays to use it.
In plain English
So who actually owns this thing at the end of the day, you or the person collecting your rent every month? That question is the whole heart of a true lease, and once you understand it, a lot of property and business arrangements suddenly make sense.
In a true lease, the answer is clear. The landlord, or lessor, remains the real owner throughout. They keep the property on their books, they claim any depreciation or capital allowance benefits, and they carry the risk if the property loses value. The tenant, or lessee, just pays for the right to use the space or equipment for an agreed period, and at the end, they hand it back. No hidden ownership, no disguised instalment purchase, just straightforward use in exchange for rent.
This matters a lot in Nigeria, especially with commercial property and equipment leasing. Say a bakery in Lagos leases an industrial oven and a shop space from a landlord who structures it as a true lease. The bakery pays monthly rent, uses the oven and the shop to make its bread, but never owns either. The landlord is the one who can claim capital allowance on the oven with the tax authorities, because on paper and in practice, it is still theirs.
In the United Kingdom, true leases show up often in retail and office space. A shop chain might lease a unit on a high street under a true lease, paying rent for the years agreed, with the landlord holding onto the freehold and all the benefits that come with owning it outright.
For Nigerians abroad sending money home to help a relative rent business premises, it helps to ask whether the arrangement is a true lease or something closer to a rent to own deal. The difference decides who eventually owns the property, and who carries the tax and depreciation benefits along the way.
A landlord in Abuja leases out a warehouse to a logistics company for ₦3,000,000 a year under a true lease. The company pays rent and uses the warehouse fully, but the landlord still owns it, still claims depreciation on it for tax purposes, and takes it back once the lease ends.
Questions people ask
Is a true lease the same as rent to own?
No. Rent to own is designed so the tenant eventually owns the property after paying enough over time. A true lease has no ownership transfer built in. The tenant uses the property and returns it at the end, full stop.
Why would a landlord prefer a true lease?
Because they keep the tax benefits, such as depreciation or capital allowance, and they retain full control of the asset. It also protects them if the property's value rises, since that gain stays theirs, not the tenant's.
Can a true lease apply to equipment, more than buildings?
Yes, very much so. Businesses often use true leases for machinery, vehicles, or office equipment, paying rent to use them without ever owning them, which keeps big purchases off their books.
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