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Lagos State Government reduces Land Use Charge

BellaNaija.com

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Lagos State Government reduces Land Use Charge - BellaNaijaThe Lagos State Government has announced the reduction of the Land Use Charge.

The charge had encountered severe criticism, with several residents of the state complaining about receiving bills amounting to hundreds of thousands.

The Nigerian Institution of Estate Surveyors and Valuers (NIESV) had criticised the charge, asking that the government conduct valuations on properties in the state.

EiE Nigeria had also staged a protest, along with lawyers in the state, asking that the charge be reversed.

The Lagos State Government announced on their social media accounts that the charge has been reduced.

With the new charge, commercial properties will get a 50% reduction; properties both occupied by an owner and used commercially, and those used for industrial purposes, will receive a 25% reduction; while exclusively owner-occupied properties will receive a 15% reduction, the government said.

Commercial Property: Commercial Property Owner, who are undoubtedly the stakeholders mostly impacted by this amended Law will be granted 50% discount. This means a commercial property valued at N20M which was earlier billed N91,200.00 will now pay N45,600.00 per annum.

Property Occupied by Owner and Third Party & Property Used for Industrial and Manufacturing Purposes: These categories of property will enjoy 25% discount. This means that a N20Million property expected to pay N30,720 will now pay N23,040 per annum.

Owner-occupied Property: This category of property will enjoy 15% discount. For a N20 Million property, this used to be N9,120 now, it is N7,752 per annum.

The penalty regime for late payment of LUC has been waived completely. Therefore, LUC payers who have received their bills will no longer be penalized for late payment of bills issued in 2018, thereby providing additional relief to LUC payers.

Other rates and reliefs,apart from the ones stated above remain unchanged & will be implemented as stipulated by Law. These include 40% general relief, 10% for 70 years and above, 105 for properties owned by persons living with disability and 10% for properties that are 25yrs.

Owners of Property across all categories will now be allowed to make payments by installments. This will help to reduce the burden of taxation on our citizens..

Those who have paid the original amount will be awarded tax credits to the extent of the excess amount paid and carried forward to next year. This is due the faithfulness displayed by performing their civic duties by paying the LUC.

7 Comments

  1. BBalogun

    March 15, 2018 at 4:44 pm

    Dear Lagos State Governor,
    Your Excellency, please why charge Land Used Charge on an empty undeveloped land?
    Sir of what use is the land being put to at this point?
    You may not be aware but before anybody can develop in Lagos State, that individual or company has to pay (1) high Lagos State consent fees, (2) very high building approval fees, (3) Survey Fees, Environment Impact Assessment fees and professional fees and (4) subjective but high Individual tax clearance fees for both buyer and seller. This process can take months or years depending on how “motivated” your civil servants are. Yet not value or use to the parcel of land. Only expenses, interest cost, increased taxes and levies from the same government that wants to generate “growth”. Sir, you are simply punishing investors by charging LUC on a property with no economic value due to the numerous bottlenecks and processes of Lagos State.
    The truth is most of your civil servants and commissioners are detached from reality because they never pay all these fees and taxes. How can people earning a decent and honest living afford the taxes at every stage in the building process?
    Gradually, Lagos State is becoming very unattractive for new investments and real estate developments due to the short-sightedness of its decision makers.
    Thank you

    • Ovadje

      March 17, 2018 at 6:49 am

      @BBalogun, part of the revenue collection regime that came into force with the new Land Use Charge law is that as from March 1, all revenue is payable online. Thus, you can pay your fees online without having to “motivate” any civil servant.

      Meanwhile, the Land Use Charge is calculated by multiplying the market value of property (i.e. the sum of land value and building development value, as determined by professional surveyors) by the Annual Charge Rate on the property. It also eliminates the multiplicity of property taxes by consolidating all property and land based rates and charges payable under the Land Rates Law, Neighborhood Improvement Charge and all Tenement Rates, and provides that such other rates shall cease to apply to any property on which land use charge has been levied, which is a very good development. Furthermore, it exempts disabled persons, aged persons, owners/occupiers of old properties (25 years and above), and non-profit making entities, which is all good. Accordingly, while we may quibble over rates (as if property owners have not raised the rents many times over in the past 18 years), the law overall is a sound one.

      Lagos is by far the best place to do business in Nigeria, in terms of the ease of doing business indices, and has the best infrastructure (and arguably the best security) in Nigeria. Accordingly, we should expect (and frankly should be able) to pay a little bit more than we would in (say) Jigawa or Zamfara, not just to maintain what has been put in place for our collective benefit, but also to add to same. Better soup na money…and all that.

  2. BB

    March 15, 2018 at 5:15 pm

    Ambode and cohorts, ori yin ti gbale( your heads no correct)

  3. buy247 Nigeria

    March 15, 2018 at 5:47 pm

    This is so much better

  4. James

    March 15, 2018 at 6:12 pm

    Ambode, sorry to say, the reduction did not go low enough. I expected the payment to come down by about 80%, especially for home owners who still will find this bill high and difficult to pay. Instead, what he has done is give the largest reduction or discount to commercial property owners who have been the loudest group to challenge the increase. He is essentially trying to pacify one group he feels could make the most trouble and ignoring the homeowner’s plight

    The retired homeowner on pension which has not been adjusted for inflation and a government that chronically owes pension arears will mostly feel the brunt of this bill.

  5. Bimbo

    March 15, 2018 at 8:11 pm

    Churches and Mosque should not be exempted …they are too many and they make the most money and create the most traffic

  6. Ovadje

    March 17, 2018 at 6:59 am

    PS: BTW, the LUC applies to PROPERTY and not to undeveloped plots. It merely uses land value as a component of calculation for charges on properties.

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