4 key points in the new Lagos 2020 Land Use Charge

Lagos State Government has released the new provisions in the new 2020 Land Use Charge (LUC) Law, which entails the reduction in penalties for defaults, the people exempted from the charge and forfeiture of N5.8 billion penalties among others.

While presenting the guideline to the public on Wednesday, the Commissioner of Finance, Dr Rabiu Olowo, explained in 2018, there was an increase in the Land Use Charge rate as well as the method of valuation of properties, this shock had a sporadic increase in Land Use Charge payable by property owners.

He said, “In view of the aforementioned, the current administration decided to review the Land Use Charge law by reversing the rate of Land Use Charge to pre-2018 while upholding the 2018 method of valuation.”

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Back story: Earlier on Wednesday, Nairametrics reported that the state government revoked the 2018 land use charge. According to Olowo, the government reverted to pre-2018 land use charges.

He said, “The penalties for land use charges for 2017, 2018, and 2019 have also been waived, which translates to a loss of revenue amounting to N5.6billion.

Below are 4 key components of the new law:

People exempted from the law:

All property owned and occupied by pensioners are exempted from paying the LUC. The definition of Pensioner, according to the state, has been expanded to include all retirees from private and public institutions in the state or any person that has attained the age of sixty (60) years and has ceased to be actively engaged in any activity or business for remuneration.

Non-exempted

• Profit oriented Cemeteries and Burial Grounds are no longer exempted from payment of Land Use Charge
• Private Libraries are also no longer exempted from paying Land Use Charge

Reductions of penalties and rates

• Days Outstanding Before Now
  45-75 days from 25% to 10%
  75-105 days from 50% to 20%
  105-135 days from 100% to 50%
• A 48% reduction in the Annual Charge Rates:
  Definition Areas Before Now
  Owner-Occupied Residential Property 0.076% to 0.0394%
  Industrial Premises of Manufacturing Concerns 0.256% to 0.132%
  Residential Property/Private School (Owner & 3rd Party) 0.256% to 0.132%
  Residential Property (Without Owner in residence) 0.76% to 0.394%
  Commercial property (Used by the occupier for Business Purposes) 0.76% to 0.394%
  Vacant Properties and open empty Land 0.076% to 0.0394%
• Annual charge rate for Agricultural land was reduced from 0.076% to 0.01%. This is an 87% reduction from the old rate.
• Penalties for Land Use Charge for Year 2017,2018 and 2019 have also been waived. This translates to N5,752,168,411.03 potential revenue waived by the State.
• In addition to the reintroduction of the 15% early payment discount, an additional COVID 19 incentive of 10% will be granted on the total amount payable. This makes the total discount for early payment 25% if payment is made before the due date
• The penalty for obstruction of officials and damage to property identification plague has been reduced from N250,000 to N100,000
• The penalty for inciting a person to refuse to pay LUC has been reduced from N250,000 to N100,000
• The 2020 LUC Law introduced a 10% and 20% special relief for Vacant properties and Open empty land, respectively.
• The right of enforcement has been reduced from notification of three (3) default notices to (2) default notices.

Agents of LUC

• Section 14 of the Law which makes it possible for the Commissioner to appoint any person including an occupier of a chargeable property to be an agent of the owner for the purpose of collecting Land Use Charge.

“While we assure Lagosians that our typical response time will not exceed 24hours, we urge anyone who feels dissatisfied or whose complaint results in a dispute to please contact the Lagos State Appeal Tribunal. Let me state that we share in the pain which the pandemic has brought on every household including the government,” he added.

Olowo added that while the state hopes for the return of normalcy to business activities, it is important to let residents know that, the payment of LUC is not intended to inflict any hardship on anyone.

Meanwhile, property owners are expected to receive their 2020 LUC bills shortly and they are to leverage on the 25% early payment discount.

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