The Lagos state land use charge is a property tax backed by the Land Use Charge (LUC) law of 2018. It is a consolidation of ground rent, tenement rate, and neighborhood improvement levy. The Law backing LUC was first enacted in 2001 but was repealed and re-enacted to address some identified challenges after its introduction in 2018. The new law then imposed an increased tax on property owners in the state, which was vehemently opposed by the critical stakeholders.
According to authorities, some of the major challenges that warranted its review include, the lack of clarity on the LUC formula to support self-assessment, obsolete rates that had not been reviewed in over a decade and the need to improve LUC administration and efficiency. The amended Law also provides a robust legal and regulatory framework to support LUC administration reforms aimed at growing the state’s economy.
After so many pressures arising from the people, government reviewed the increase on the land fee stating that payment can be done in installment and that such would relieve house owners the burden of paying the amount once. In addition, the state government announced a 50 percent discount for commercial property owners while private property owners and those assets use for industrial activities were given 25 percent increase.
According to government statement, “Commercial Property Owner, who are undoubtedly the stakeholders mostly impacted by this amended Law will be granted 50 percent discount. This means a commercial property valued at N20 million, which was earlier, billed N91, 200.00 will now pay N45, 600.00 per annum. Property Occupied by Owner and Third Party and Property Used for Industrial and Manufacturing Purposes: These categories of property will enjoy 25 percent discount. This means that a N20Million property expected to pay N30, 720 will now pay N23, 040 per year.
Property occupied by owners was given 15per cent discount off the reviewed land use fee. This category of property will enjoy 15 percent discount. For a N20 million property, this used to be N9, 120 now; it is N7, 752 per annum. The state government added that other rates and reliefs remain unchanged & will be implemented as stipulated by Law. These include 40 percent general relief, 10 per cent for 70 years and above, 105 for properties owned by persons living with disability and 10 percent for properties that are 25yrs.”
The government also revealed that penalty for late payment has been waived and those who have paid the fee allocated to them would enjoy tax credits. The LUC is payable in respect of all real estate property situated in Lagos State.
A visit to the Jobi Fele Way building in Alausa, Ikeja that hosted the tribunal revealed that some of the those who had to approach the tribunal on complaints bordering on high charges placed on their properties were from, Ajeromi-Ifelodu, Ikeja, Oshodi-Isolo, Lagos Mainland, Lagos Island, Agege, Surulere, Ifako-Ijaiye and other part of the state.
A property agent Mr. Sunday Ajaiye told The Guardian that he was in the facility to expressed concerns over a N500, 000 charge imposed on a commercial building owned by his company. According, there was a huge discrepancy between what they used to pay and the charges brought recently.
“I was worried by the LUC charge brought to our office lately because before now we pay about N300, 000 but the new bill brought was about N500, 000. So I have to come here with our colleague to seek a redress of the situation.”
“Our complaint centred on the fact that officials of the land use charge need to get their valuation procedure right because it’s unfair to just award charges that doesn’t commensurate to the worth of property that people has in their sites. They should be more diligent to avoid unnecessary complaints by property owners, agents and others”, he stated.
Ajaiye who also manages a two-storey building used for religious purpose lamented the outrageous amount being charged on the property. He disclosed that before they used to pay about N40, 000 but in the charge brought by the officials, the building was awarded about N100, 000.00. He appealed to the tribunal to carry out a downward review of the charge.
Speaking on his experience on the Land use charge/ tribunal, Mr. Abubakar Kadiri from Lagos Island said, “The delays, which we face here, is a waste of useful man-hour. Only two-stand point were put in place to attend to complaints and so a person has to wait endlessly before he would be attended to. I think those in charge have to get enough hands for quick discharge of complaints. As you could see, the place is jam-packed and crowded.”
With the harsh economic realities and the high land charge fees, Kadiri said the new Land Use Charge Law should have focused on the issue of avoidance in payment rather than a hike, in order to ensure more property owners pay.
Sources disclosed that the state’s land use charge are only by paid about 300,000 properties out of an estimated two million eligible properties in Lagos State as at 2017.
On her part, Mrs. Yetunde Salami from Surulere said, “Those in charge overdo things, the charges are too high and they need to understand what is happening in town economically, there is no money. If the authorities keep bringing high charges to the people, the rate of avoidance in payment could be very high. For instance, the charges that was awarded to us was extremely high. I doubt, if government would achieve its revenue target with this development. Government revenue drive would have been achieved if the old rates were maintained for all properties in the state.”
While commending government’s initiative for setting up the land use charge resolution week, Mr. Jude Okafor from Oshodi-Isolo however urged authorities to address issue of overvaluation and exemption for some properties owners in the state.
According to him, there was the need to decentralize the location of the tribunal for respective property owners instead of everybody coming down to Ikeja to make their complains known.
“Somebody that builds house while he was active in service and was paying between N200, 000 and N500, 000, now that he is retired, no income again. How can he continue to pay that same amount?” he stated.
DAILY SUN
