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By Step Rights Magazine
Buying or selling land or a motor vehicle is one of the most common transactions in Nigeria. Many people still believe that once the buyer and seller agree on the price, payment can be made in cash without any legal consequences. However, Nigerian law has significantly changed this position.
Today, accepting or making large cash payments for the purchase of land, vehicles, or other high-value assets may amount to a criminal offence.
What Does the Law Say?
The Money Laundering (Prevention and Prohibition) Act, 2022 prohibits large cash transactions outside the banking system.
Under the Act:
- An individual must not make or receive cash payments exceeding ₦5,000,000 except through a financial institution.
- A corporate body must not make or receive cash payments exceeding ₦10,000,000 except through a financial institution.
The purpose of the law is to combat money laundering, terrorism financing, tax evasion, and other financial crimes by ensuring that substantial financial transactions can be traced.
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What About Land and Motor Vehicle Sales?
Land and motor vehicles are regarded as high-value assets.
The law encourages payments for these transactions to pass through recognized financial institutions such as banks. This creates an official record of payment and helps prevent criminals from using property transactions to conceal proceeds of crime.
Consequently, collecting millions of naira in physical cash for the sale of land or a vehicle may expose both the buyer and the seller to criminal liability where the transaction violates the statutory limits.
The Supreme Court Has Spoken
In Aliyu v. Federal Republic of Nigeria (2026) LPELR-83493(SC), the Supreme Court reaffirmed that parties must comply with Nigeria’s anti-money laundering laws when conducting high-value transactions.
The Court emphasized that exchanging large sums of physical cash for landed property in violation of statutory requirements can constitute a criminal offence.
This decision reinforces that compliance with anti-money laundering legislation is not optional.
Practical Examples
Example 1: Sale of a Used Car
Mr. Ade sells his vehicle for ₦3 million and receives cash.
Since the amount does not exceed the statutory cash limit applicable to an individual, the transaction is generally not prohibited, although proper documentation remains advisable.
Example 2: Sale of Land
Mrs. Bello sells her land for ₦25 million and receives the entire amount in cash.
This transaction may violate the Money Laundering (Prevention and Prohibition) Act because the payment exceeds the permitted cash threshold and should ordinarily be conducted through a financial institution.
Example 3: Splitting the Payment
A buyer agrees to purchase land for ₦12 million but pays ₦4 million in cash on three different occasions solely to avoid the ₦5 million limit.
Such structuring may itself constitute an attempt to evade the law and may attract criminal investigation.
Why Bank Transfers Are Safer
Using bank transfers or other recognized banking channels provides:
- Evidence of payment.
- Protection for both buyer and seller.
- Easier resolution of disputes.
- Compliance with anti-money laundering laws.
- Reduced risk of fraud and theft.
Penalties
Violations of the Money Laundering (Prevention and Prohibition) Act may attract serious criminal consequences, including prosecution, fines, imprisonment, forfeiture of assets where applicable, and other sanctions prescribed by law, depending on the facts of the case.
Step Rights Legal Insight
The objective of the law is not to criminalize genuine property transactions. Rather, it seeks to ensure transparency and accountability in high-value financial dealings.
Before purchasing or selling land, houses, or vehicles, avoid accepting or paying large sums in physical cash. Use bank transfers, certified cheques, bank drafts, or other traceable financial channels. Doing so protects both parties and demonstrates compliance with Nigerian law.
As Nigeria strengthens its fight against money laundering and financial crimes, every citizen should understand that convenience must never come before legal compliance.
Disclaimer: This publication is for public legal education only and does not constitute legal advice. Individuals involved in specific transactions should consult a qualified legal practitioner for advice tailored to their circumstances.
