Sequel the the thread that made the front page last week, wherein I promised to create a topic to address the issue, I've decided to do so in series. On this thread, we would try to address critical issues regarding the LUC and how it affects you.

What is property tax? According to wiki: A property tax or millage rate[1] is an ad valorem tax on the value of a property, usually levied on real estate. The tax is levied by the governing authority of the jurisdiction in which the property is located

The above definition tells us that it a tax on real estate asset, let me say tangible assets, like your land and all improvements on that land.

What is Tenement rate in Nigeria, we came to know the property tax as tenement rate, which could mean the same thing. In other country, they call it property tax, but in Nigeria, it was known as tenement rate. The local government do collect it prior to 2001 in Lagos State, Hence its a local tax by the local administration on all properties at the province or local level to generate income for the government, in oder to provide infrastructures.

What is Land Use Charge? As posited above, we had the tenement rate and some other property based taxes that are to be paid by owners of land (not tenants). Bola Ahmed Tinubu became Governor of Lagos State in 1999 and realized the poor collection of the tenement rate and inability of the local government to point out strategic programs that the funds were channeled to. Remember, we were under the military rule until 1999, hence the corruption was so obvious.

BAT then created the LUC, which unified the entire taxes to be paid on land as the Land Use Charge. The land Use charge is the combination of tenement rate, Neighborhood charge and Ground rent. Let me explain what Neighborhood charge and Ground rent means

Tenement rate: Tax payable annually on your landed property in the area it is located, to local government
Neighborhood Charge: Payment of tax for the uplift of the neighborhood where your property is located
Ground Rent: Remember the land use Act of 1978 vested the ownership of all Land to the State government, hence everyone is a tenant with the government for 99 years. Remember also that your C of O is only for 99 years max, hence the rent you pay Government annually is called Ground rent. Payable to the state government

The above 3 distinct taxes were harmonize by BAT as one and the responsibility of collection was placed in the hands of the state government, who will then spend the money on the entire state for the benefits of all. For instance, Instead of the local government chairman to collect tenement rate on a property worth N5 billion naira in Ikoyi and spend the money on frivolous things like boreholes etc the state government will collect and spend on meaningful projects spread across the 20LGAs and 37 LCDAs

In 2001, BAT came up with the Land Use Charge Law No. 11 of 2001 of Lagos State. The Land Use Charge Law which is applicable to all properties in Lagos State as a unified property charge, came into operation on the June 22, 2001 (“LUCL”).

The LUC has been there since 2001 and all forms of tenement rate was no longer collected after the unification. But many Nigerians do not know. Nigerians, I mean all of us, cos Igbo's, Yoruba's, Hausa, TIV, American, British, Lebanese, Indian, Ghanians etc own properties in Lagos. Many ous do not pay taxes at all on anything. This is the truth.Up till today March 3rd, many of us don't even Pay at all, but we love to criticize the government.

Remember, Tax is a civic responsibility. Go to UK, ask all the players in the EPL how much they pay as taxes. It's up to 30% of what they earn weekly, hence the UK is progressing cos of successful tax administration.

Conclusion, LUC had been with us since 2001, but since we don't pay, we have no idea that it exist. The Government of BAT and Fashola didn't do much to enforce payment and since 2001 to amendment or increment and less than 300,000 properties pay LUC in Lagos State out of over 2,000,000 houses that we have in the Lagos State.

LUC should not be confused as income tax, VAT, Capital gains Tax, Capital Transfer Tax, consumption tax etc.
LUC is tax payable by a Landlord. The person who has money and decided to buy property with his money. The government will tax you and use the money to provide houses for others. Houses are not only for the rich. The poor too deserves to own properties.

I am privileged to have traveled to some countries and did enquire how they do it.

In South Africa, UAE, England, USA, Canada, Japan, Australia, Ethiopia, Ghana etc all these are applicable.

If you don't own a property, you're not to pay Land Use Charge. It is an ownership tax.

Tell your landlord I said so and it is backed by Law.

All tenants should relax, as this is not for you.

As a private citizen of Nigeria, residing in Lagos, I pay the following

1. Income tax monthly to State government
2. VAT to Federal Government
3. Consumption tax to state
4. LUC to state government cos I own properties

These are applicable in most countries that I've visited.

There are other taxes that has nothing to do with real Estate eg
Consumption tax
VAT
Income tax
Stamp duty
Capital transfer tax etc

I created this thread to educate us on the history of LUC, in order to educate people and would be creating other parts later this month to address

1. The 2018 LUC law
2. Collection
3. Proposed Valuation
4.reliefs provided
5. How the money would be spent.

Feel free to share, just acknowledge the source and not plagiarize.

I am opened to answering any Question at all, pertaining to the LUC. The various LASG officials are interested in how Lagosians feels about this subject, hence they paybvery serious attention to Nairaland, based on my discourse with them yesterday

The moderators (Seun Mynd44) should do the needful by posting this important thread for all to see.

Itesiwaju Eko ati Nigeria, lo je wa logun.

God bless you all

In my next thread, I'll elaborate on the enumeration and Valuation that's commencing next week.

Ahead of the valuation, the attached flier shows what home owners you get ready and present to the valuers when they arrive.

As posited feel free to ask any question regarding the land Use charge and I'll oblige you with response.

It is better to get information from the right source rather than from rumors

Some critical aspect of the 2018 Law is explained below

THE EXEMPTIONS

The exemptions include:

(a) Property owned and occupied by a religious body and used exclusively as a place of worship or religious education; This means your churches and mosques or Shrines are exempted, but not a hospital built by a church and they charge patients thousands of Naira. Not Private Universities where they charge millions as School fees. Not event centres and halls owned by churches or mosques that people rent and paid income to the church

(b) Public cemeteries and burial grounds as well as property used as a registered educational institution certified by the Commissioner of Finance (theCommissioner) to be non-profit making; This doesn't protect Private universities or Schools cos they are making profits. Burial grounds like Atan Cemetery, Ikoyi Cemetery, Ikorodu cemetery are exempted. But Victoria court cemetery, Ebony Vaults and Gardens and other private cemeteries are to pay Land Use Charge. They don't allow you bury the dead for free, but you pay millions for burials, hence they're to be taxed.

(c) Palaces of recognized traditional rulers in the State; Oba's Palace are recognized Baales palaces are exempted. But not a chief's Palace. A chief would pay Land Use Charge


(d) Any property specifically exempted by the Executive Governor by notice published in the State Official Gazette.

Please take your time to understand the reliefs that are available to payers of LUC.
I'll also break it down for you

•The reliefs include:

a)General relief of 40% (applicable to all property liable to pay LUC); This means that As soon as your property value has been determined, take out 40% of the value and you're left with only 60% of the market value to be assessed for LUC. Worked example. A property located at Number 12, Ogudu road has been valued by Professional Estate Surveyor and valuer as say N10 Million naira (Land +Building) The law says that your N10million value goes down to N6million. It is on that N6million that you'll be assessed. For annowner occupier whose property is N6million naira your annual land use charge will be about N15,000 for a whole year. Your LUC is less than amount you spend on fuel for 1 month

b)Specific reliefs applicable to property owners and leases of 10 years and above for:

I.Pensioners (60 years and above)–100% for owner-occupied property: Your Father or Grandfather who owns a house and he's a pensioner and also above 60 years, he pays nothing. If the property is in Ikoyi and worth N500, Million, Papa is 100% free from liability


II.Persons with disability–10% for owner-occupied property: In addition to the 40% instant reduction of your market value, if you're disabled, you get additional 10%. Let me explain. Market Value is N10 Million, you get (40%+10%) relief. Hence, as a disabled, you're left with 50% of the value of your property, which is N5 million. So the LUC for a disabled Owner Occupier is N12,800 for the whole year. Less than Dstv or Fuel money

III.Aged persons(70 years and above) –10% for owner-occupied property: This implies that your Father or Mother that are not pensioners but private citizens but own a house, they'll get 10% in addition to the 40% automatic reduction. Same example above applies

Market Value is N10 Million, you get (40%+10%) relief. Hence, as an old man private citizen aged 70, you're left with 50% of the value of your property, which is N5 million. So the LUC for a disabled Owner Occupier is N12,800 for the whole year. Less than Dstv or Fuel money

IV.Age of property–10% for property aged 25 years and above: This is also 10%+40% relief. If you've built a house and the house was built say in 1980, you get 50% relief. Same N10million analogy applies

V.Long occupation by owners–5% for 12 years and above: This means if you've been residing in your house as owner for 12 years, you get 5%+40% automatic relief. Hence, the value of your property drops by 45%

VI.Federal and other State Government property–20% for non-revenue generating property: This covers the likes of TBS, National theatre etc

To better understand the above reliefs, you need to engage a professional Estate surveyor and valuer to help you

Who is to Pay LUC? Tenant or Landlord?

See below

LIABILITIES

The ‘owner’ of the property has the duty to inform the Commissioner of the loss of exempt status or risk a penalty of up to 3 times the exemption in issue. : The owner of the Property

Under the new law, persons liable to pay LUC have been extended to include occupiers holding long leases of 10 years and above. This, on the other hand, excludes tenants with short leases: By law, any lease that's more than 5 years is to be registered, as it temporarily transfer ownership from the landlord to the tenant. If you're a beneficiary of a long lease in excess of 10yewrs, you the tenant will pay the land use charge. But if you're a yearly tenant, it is the responsibility of your landlord


The term ‘Occupier’ has also been defined in the new legislation to include persons unlawfully occupying a property.: If you're staying in a property after you've been given a quit notice or you unlawfully hijacked ownership, the law sees you as an occupier and you'll be liable as applicable by law

Enumeration and Valuation of all Billable properties in Lagos State for LUC purposes


The LASG under the leadership of His Excellency Governor Akinwunmi Ambode is ready to turnnthings around and allow proper assessment to be done. The anomalies noticed in the previous LUC administration and collection process is about to be revamped. There would be no abnormal billing or improper assessment or 'crazy billing' as the Electricity Distribution Companies are known for.

The H.E has commissioned Registered Estate Surveyors and Valuers about 112 to carry out a proper enumeration, data capturing and valuation of all properties in Lagos State for LUC purposes.

About 700 field personnel would be engaged, that would be going round every day for the next 6 months.

What are they to do? They are to enumerate, capture Data and thereafter carryout professional valuation of all properties in Lagos.
No more over valuation, as professional valuation would be carried out for proper assessment

You're not to pay the valuers a dime, as the government will pay, all you need to do is to cooperate with them when they come and answer relevant questions they may ask.

See the attachment for things to be shown to the field personnel that would be going round.
Exercise starts next week and would end by 31/8/18

Hours is between 8:00am to 5:00pm Monday to Friday.

They would be going round from street to street, ward to ward and Local government to Local government

Summary plz...I have headache this morning

bloomstar:
s

Wic kind person u b
What's S
Ftc go do u strong thing ooo

I provide my own electricity, i repair roads in my community.

Why the fụck would i wanna pay tax to an irresponsible government

lagos is lagos you can't compere any state with lagos city nigeria.

1.Good that Lagos State is trying to harmonise this but saying that it's only the house owner that will pay the luc charge in a building occupied by tenants sounds like fables. We all know that subsequent rents will be increased no doubt.
2. There should be an outline on what this luc charge would be used for in each area cause the Lagos I know will probably collect luc charge from surulere to develop Egbeda and I am saying this cause what I see along itire road these days gives me serious concern. I am not even talking about the street where I live: no water, never tarred,provide my own security,area boys everywhere etc. the only thing we are good for is paying this and that.
3. Lagos is making so much money already from all the other taxes they collect both this you mentioned and hidden ones too. And to tell you the truth something is not just right. I don't want to go into all my observations of recent but trust me people are watching cause work done is not felt at all.

Not against your so called luc charge but Lagos needs to 'show working'.

If so much effort is put into making Lirs achieve this result then what is stopping other ministries from doing the same?.

thanks for the info

Emperor07:
Summary plz...I have headache this morning

stop all these silly jokes for cheap likes, nigger

Ok now

ok

OP please as you took your time to write this, just take a fraction of it to summarize it abeg.

Ojuororun:
lagos is lagos you can't compere any state with lagos city nigeria.

And you point is?

Please summary, since I moved into my house in 2014, I've not received any bill to go pay for land use charge. All d other house gets d bill every year except me. I wanted to meet them but on a second thought, why should I report myself. Its a free launch to me. When they're ready they'll give me bill then I'll start paying. After all d govt is not useful to me

Weldone

doingood:
Please summary, since I moved into my house in 2014, I've not received any bill to go pay for land use charge. All d other house gets d bill every year except me. I wanted to meet them but on a second thought, why should I report myself. Its a free launch to me. When they're ready they'll give me bill then I'll start paying. After all d govt is not useful to me

Correct man.

But paying tax is your civic responsibility sha.

Since you don't pay tax, gimme one free room in ya duplex abeg

Is LUC for all properties or the ones wits C of O?

If the government were actually using the fee for the benefit of the people, no one would have complained.

Fuel is now 185 naira per litre, in my area.

Ambode is just trying to steal from Lagosians legally.......

Eko ti baje......

Op please stop this.

Is there any propert in lagos valued at less than 30 million?

I have been paying LUC of 54k for the last 5years and i just received my 2018 bill. Its been jacked up to 400k.

Dont be deceived lagosians by government agents like d op, this current LUC law is a massive injustice that has been passed into law by Ambode.

Nice educative post OP. I enjoy reading writeups by tax enthusiast, their passion is another level.

So do you have interest in researching on taxation of crypto- currencies? I have been thinking of that for a while and recently some jurisdictions have indicated interest.

Pls Op,the prossional valuers engage by d Lagos govt how do we indentified them? (2) Can we have the valuation copy ? And can the copy be used for any other purposes? Thanks

Is the tenants,students or religious members that will end up paying the tax

From your tone it's clear you are part of the direct beneficiary of the impending 200 % LUV hike and that's ok but ist wrong for you to deceive tenants that LUC hike won't affect them when in reality they are the only ones it would affect ..its no secret that a major constituent of what we call rent in Lagos is LUC and the cost of LUC is always carefully hidden inside rent ..so in reality the only people the hike is targeted are the tenants and not property owners like you would erroneously want tenants to believe, in reality the landlord is just collector on behalf of the govt.

As soon as they drop it for us. I open it and bin it. We no go pay come beat us

Ok

Ambode Well-done sir

That money is a rip off abeg. It is initially meant for the local govt so they can use it to develop the LCDAs. But the thieving state government can't get enough of it, and they now decided to increase it again
Bleep all of them. They keep saying UK and US people pay Land Use charge, is minimum wage 18k in those places?