In August 2020, the Lagos State Government released a new provision for the Land Use Charge (LUC) Law with new adequacies such as reduced penalties for defaulters, category of exempted people from the Land Use Charge and forfeiture of N5.8 billion penalties.
With the introduction of reductions on land charges, the commission also implemented an increase in the Land Use Charge rate as well as the method of valuation of properties. This application has increase payables of Land Use Charge by property owners.
“Currently, the Land Use Charge rate is in line with the pre-2018 law, while upholding the 2018 method of valuation.”
Crucial components of the new Land Use Charge Law
People exempted from the law:
Property owned and occupied by pensioners are exempted from paying the LUC. This law covers both 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.
- Profit oriented Cemeteries and Burial Grounds
- Private Libraries
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.