RELEVANT PROVISIONS UNDER THE NEW LAW

It is essential that attention is paid to these relevant provisions which seem to be the pivot of this legislation:

1. Each local government area in the State has been given powers under the new law to
be the collecting authority for land use charge. Such local government will under the new
law be the only body empowered to levy and collect the land use charge areas within
its specified jurisdiction.

2. Land use charge is payable on ALL property except those exempted under Section 12
of the new Land Use Charge Law, 2018 (LUCL).

3. The formula adopted for land use charge is now based on the commercial value of the property, which valuation will now be based on assessment by professional Estate Valuers appointed by the state; and which valuation will continue to be updated on five yearly basis.

4. According to the Law, the annual charge rate to be applied to eligible property in Lagos State shall be as follows: owner-occupied residential property – 0.076 per cent per annum of the assessed property value, and owner-occupied pensioner’s property.

5. Exempted from the Law are the state owned properties, while chargeable properties include residential property (without owner in residence) at the rate of 0.76 per cent per annum of the assessed property value, commercial property (used by occupier for business purposes) at the rate of 0.76 per cent per annum of the assessed property value and vacant property and open empty land at the rate of 0.76 per cent per annum of the assessed property value. Industrial premises of manufacturing concerns at the rate of 0.256 per cent per annum of the assessed property value, residential property (owner and third party) at the rate of 0.256 per cent per annum of the assessed property value.

6. The Law also provides various forms of reliefs that are available to payers of LUC. The reliefs include general relief of 40 per cent (applicable to all property liable to pay LUC), and specific reliefs applicable to property owners and leases of 10 years and above for pensioners (60 years and above) which is 100 per cent for owner-occupied property, persons with disability 10 per cent for owner-occupied property.

7. Others include aged persons (70 years and above) 10 per cent for owner-occupied property, age of property 10 per cent for property aged 25 years and above, long occupation by owners five per cent for 12 years and above, federal and other state government property 20 per cent for non-revenue generating property, partial relief under the LUC Law – 20 per cent for non-profit-making organizations.

8. To enjoy the available reliefs, payers will need to provide relevant documentary evidence to support their relief claims. All LUC paid within 15 days of receipt of Demand Notice will enjoy a timely payment discount of 15 per cent.

9. In essence, the major change in the current Law is the introduction of a land use charge formulae that ensure that assessments are based on ‘market’ or commercial value of land and improvements as supported or verified by professional evidence of the Estate Valuers appointed by the State.

10. The Land Use Charge payable on any property is calculated by multiplying the market value of the property by the applicable relief rate and annual charge rate using the prescribed formulae.


WHO PAYS WHAT?

• For a landlord occupying his house with his family (no tenant). Your annual fee is 60 per cent of the value of the house × 0.076. For instance, if your house is valued at N20 million. Your fee is 0.076 per cent of (60 per cent of N20 million) is 0.076 per cent x N12 million which is N9, 120.00 per annum.

• If you rented out the house to tenants only and you don’t live there and the house is worth N20 million. You will pay 0.76 per cent of (60 per cent of N20 million) is 0.76 per cent of N12 million is N91, 200.00

• If you are a landlord living with your tenant in the same building of the above value. You will pay 0.256 per cent of (60 per cent of N20 million) is 0.256 per cent × N12 million is N30, 720.00.