•Details Of The Newly Revised Rates Revealed
In 2001, the Lagos State government passed the LandUse Charge Law whichconsolidated and replaced allthe state and local governmenttaxes payable on property in Lagos State.On 28 January 2018, the Lagos State House of Assembly passedthe Land Use Charge Law 2018 to repeal and replace the Land Use Charge Law 2001. We spoke with Lagosians to come up with series of questions on the Land Use Charge. Officials of the Land Use Charge Office were contacted and here are answers to some of the questions.
WHAT IS THE LAND USE CHARGE?
The land use charge is a consolidation of all property and land based rates and charges payable under Land Rates, Neighbourhood Improvement Charge and Tenement Rates of Lagos State.
WHO IS LIABLE TO PAY?
The responsibility to pay lies primarily with the property owner, however there is a provision in the law establishing the charge for payment to be made by the occupier who is then empowered to look for reimbursement of the charge from the property owner.
IS CHARGE NEGOTIABLE?
No. However for payments that are made within 15 days of getting the demand notice, a 15% discount is applicable. This is to encourage prompt and early payment. It is also to discourage defaults.
WHAT SHOULD I DO
IF DEMAND NOTICE IS RECEIVED LATE?
All claims of late receipt of demand notice of the Land Use Charge will be checked against a proof of the delivery date. Where claims are verified in favour of the property owner, the property owner is issued with a new Land Use Charge Demand Notice which will enable him enjoy, the discounts available and applicable.
DO I PAY LAND
USE CHARGE ON AN EMPTY LAND?
Yes. Since the Land Use Charge includes all land based rates in the state.
CAN PROPERTY IN THE SAME AREA AND SIZE GET DIFFERENT CHARGE?
For the purpose of the Land Use Charge properties are accessed individually. For any two similar properties, the physical appearance, aesthetics, features and age will determine the property class rates (i.e. high, medium and low) to be adopted in the valuation of the property. Another reason for charging different rates on similar properties is the usage of and status of occupation. It is noteworthy that property assessment is classified under three categories; commercial, industrial and residential usages. Owner Occupied Residential Property are 0.076% per annum of the assessed property value. Owner Occupied Pensioner’s Property are exempted from the Land Use Charge. Religious and NGOs properties exempted from Land Use Charge. Industrial Premises of Manufacturing Concerns are 0.256% per annum of assessed value. Residential Property without owner in residence is 0.76% per annum of assessed value. Commercial Property used by occupier for business purposes is also 0.76% of assessed value. Vacant Properties and open empty land are 0.076 per annum of the assessed value.
CAN ARREARS BE CHARGED IF LAND USE CHARGE IS RECEIVED FOR THE FIRST TIME?
Complaints of demand for arrears to be paid when Land Use Charge is being received for the first time should be sent to through the help lines (09092995642, 08177777782) or email address: email@example.com.
BE PAID IN FULL?
Payment to be made once and in full. However amount unpaid are carried over to the following year with its applicable penalty.
SHOULD I PAY TO?
There is a list of designated banks on the reverse side of the Demand Notice. It is important to pay to the correct bank as wrong payment invalidates payment. Other payment channels like POS and online portals are also available.
CAN CHARGE BE PAID IN INSTALMENTS?
The Land Use Charge law does not provide for instalment payment since 15% discount is provided for every payment that is made within 15 days of receiving the demand notice.
LAST YEAR PAYMENT YET TO BE ACKNOWLEDGED,
WHAT DO I DO?
All you need to do is pay this year’s charge and make complaints through the appropriate channels.
WHAT SHOULD BE DONE WITH PAYMENT RECEIPT AND TELLER?
In order to expedite the update of the payment into the Land Use Charge records, you are to scan a copy of the teller and Lagos State Government receipt issued upon payment and mail them to the Land Use Charge email address or text the details of payment to the mentioned hotlines. These details should include: amount paid, bank payment code, name of property owner and address of the property.
WHO IS A THIRD PARTY?
A third party refers to anyone other than the property owner who resides in the property. This also includes relatives of the property owner who are of taxable age.
WHAT DOES FINAL REMINDER NOTICE MEAN?
This is a notice sent to a property owner whose payment have fallen within penalty period and yet to obey the demand to pay.
IS THERE A COST ATTACHED TO ASSESSMENT OF PROPERTY?
No. Assessment of property to determine chargeable value of the property is totally free and owner of property is not liable to pay.
YET TO GET PAYMENT ID AFTER REQUEST, WHAT SHOULD I DO?
All you need to do is call the following numbers: 07080112233, 07080445566 and 08055097727, 09092995642, 08177777782.
JUST BOUGHT A PROPERTY THAT HAS LAND USE CHARGE ARREARS, WHAT SHOULD I DO?
You have to tell the person that sold the property to you to pay the arrears. If not you will be the one to pay. It is important for people who want to buy properties anywhere around Lagos now to know the Land Use Charge Payment status of the property.
HIGHLIGHTS OF THE REVISED LAND USE CHARGE LAW!!!
Properties exempt from LandUse Charge (LUC):
The mainchange in the law is theintroduction of an LUC formulathat ensures that assessmentsare based on ‘market’ orcommercial value of land andimprovements.
The exemption available tocemeteries and burial groundsunder the old law is restrictedunder the new law to publiccemeteries which means thatowners of private cemeterieswill now be expected to payLUC. Private libraries will beexempt under the law inaddition to public libraries,however, they must be certifiedto be non-profit making by theCommissioner of Finance forLagos State. In addition, theexemption for property ownedby religious bodies has beenlimited to those used as a placeof worship or for religiouseducation.
The law provides that where anyexempt property is leased out toprivate entities for revenuegeneration, they shall not beexempt for purposes of the law.This may therefore capturereligious centres that are alsoused as event centres orreceptions for a fee. However, the LUC imposed shall be proratedso that it is applied to thatpart of the year in which theproperty, or part of it, is notexempt.The owner of the property hasthe duty to inform the Commissioner of the loss ofexempt status or risk a penaltyof up to 3 times the exemptionin issue.
TO PAY LUC
Under the law, persons liable topay LUC have been extended toinclude occupiers holding longleases of 10 years and above.The law is silent on whethersuch LUC paid can be recoveredfrom the landlord.One question that arises fromthis is whether shorter termleases that are automaticallyrenewable unless expresslyterminated would create anobligation for the occupier if theautomatic renewal takes theterm above 10 years.
The law has amended thedefinition of Occupier to includepersons unlawfully inoccupation of property. This isin line with internationalprinciples on taxation that anillegality does not preclude ataxpayer from his fiscalobligations.
The law reduces the number ofthe tribunal from 15 to 9 andgives the tribunal the power toadopt Alternative DisputeResolution. Where themediation does not resolve thedispute within 45 working daysof the first session or when themediator declares an impasse,the mediation shall be deemedinconclusive and parties shall beat liberty to resolve their disputeformally at the Tribunal orthrough any other lawful means. The Law does not state who willbear the alternative disputeresolution cost.
Penalty for noncompliancewith provisions ofthe law has been increased to amaximum fine NGN250, 000 from NGN100,000.
RIGHT OF ENFORCEMENT
Therights of enforcement of theState has been extended toinclude a civil action against theowner to recover the accrued LUC or to obtain an order of Court for distrain of theproperty.
The changes introduced appearto be directed at blocking theloopholes in the old law ratherthan a fundamental change inthe LUC regime in the state.