Protests trail Lagos House of Assembly’s land use charge review

As controversy continues to rage over the new Lagos Land Use (LUC) law, stakeholders have once again urged the State’s House of Assembly to pave way for discussions on any increase by reverting to the old rate.The professionals, who spoke at the public hearing organised by the Assembly made the submission and queried the parameters used to value their property, especially without the participation of owners among other knotty issues.

According to them, the reversal will accord relevant stakeholders opportunity to study the law and come out with a workable and more robust legislation.

The stakeholders include, members of Nigeria Institution of Estate Surveyors and Valuers (NIESV), architects, residents associations, members of Building Collapse Protection Guild (BCPG), Estate, Rent and Commission Agents Association of Nigeria (ERCAAN), legal practitioners, Real Estate Developers Association of Nigeria (REDAN) and Commercial Real Estate Development Association.

For the chairman of Lekki Estates Residents and Stakeholders Association (LERSA), an association of over 77 Government and Private Residential Schemes/Estates led by Olorogun James Emadoye, the state government should return to the status quo. They directed all Lagos State property owners to pay the equivalent of the 2017 Land Use Charge for the year 2018.

This, he said was to guide against loss of revenue for 2018 financial year (that may result from inevitable tax evasion, avoidance and stiff resistance to payment of the 2018 LUC consolidated Bill).Lagos should also embark on an aggressive census of all chargeable properties so as to widen its tax base.

According to LERSA, the implementation of the Land Use Law should be suspended forthwith while the grey areas are resolved in the interest of fairness, equity and natural justice. Lagos State Government should revert to the old rates and start consultation and conversation on what will be the rate from next year.

“The government’s argument that property has appreciated, in reality this is not so, as such impressions do not consider that a property bought in 1999 for N30 million, when Naira was about N120 to a dollar and sold at N70 million, when a dollar is N360 cannot be said to have appreciated because the valuation did not consider current realities.”

Also the chairman of Magodo Residents’ Association, Kunle Eludire noted the 100 percent upward review of the multipliers index or charge rate, stressing that if government had applied only the upwardly reviewed multipliers or charge rates without adjusting the values of property as per the 2017 LUC Bills, it would still have doubled its revenue from this source.

The Association also noted the arbitral over valuation of property, stressing that by the LUC law 2018.The arbitrariness in the application of this provision, they said, is seen not just to be unfair but imposing a future tax to be paid now on the estimated market value of property that may never be sold, and if and when it is sold the government will collect capital gains tax.

According to them, it is important to point out that commercial and industrial property , apart from the differential in the multiplier or charge rate, that of owner occupier has taken care of the actual use to which the land has ben put and will also yield additional 10m percent withholding tax for government on the prevailing rents paid tenants.

They also noted that the insertion of the name of a private company as the agent for the collection of the LUC in the law is not only brazen but smirks of impunity on the part of the legislature and the executive arms of government of Lagos State.Moreso, the association said a percentage of between 25 and 100 penalty for failure to settle the LUC bill within a period of 135 days is not only callous and punitive but a design to ultimately dispossess owners of their properties.

They therefore urged the state government to adopt the internationally accepted method of valuation in arriving at the property value for the purpose of assessment n under the land use charge as follows, fair market value (forced sale value) of property and thereafter use the assessed value which should not be more than 40 percent of the fair market value of the property concerned.

It was also the contention of the association that , tenement rate professionally, is not paid on unoccupied properties, therefore , owners of unoccupied properties should only pay ground rent aspect of the Land Use Charge and not the tenement rate aspect as currently lumped under the land use charge.

“Penalties for late payment or non payment should be assessed and payable at the end of the assessed year, that is October 31, which such penalties should not be more than 10 percent of the charge. This is reasonable as government does not pay penalty on its debts to contractors who work for it”, they added.But the former solicitor general of the state Lawal Pedro SAN called for the replacement of the word delegate in Section 3 of the amendment with agreement with the collecting authorities to avoid litigations.

Also the commissioner of Finance, Akinyemi Ashade wanted valuation to be based on market value to avoid ambiguity of determining the real property values.He stressed the need for a draft regulations on the 40 to 50 percent reliefs on the LUC rates.The Chairman of the 6-member Ad-hoc committee on the proposed amendment, Bayo Oshinowo said the proposed amendment bill seek to tinker with eight sections of the 2018 law.He said the bill seeks an amendment to Section one by deleting the word Market Value from the definition and replacing it with Value.

The bill also sought to delete section three and replaced it as follows; “ Each Collecting Agent may delegate to the State by a written agreement levying and collection of such rates on houses or tenements as may be prescribed under the provisions of this law”.The principal law is further to be amended in section 9 by deleting the phrase “ or Occupier of a lease of less than ten years as well as deleting definition of pensioner in Section two and replacing it with new definition among other amendments

On his part, the Speaker, Mudashiru Obasa, said the large crowd showed the importance of the gathering, which, he said was aimed at reaching a compromise in order to move Lagos state forward.

While urging stakeholders to consider the need to move Lagos forward, which has assumed the toga of a nation within a nation, the speaker said all efforts at making the president accord Lagos a special status in order to meet its developmental challenges have not been successful, hence the need to look inward.

Meanwhile, the Ikeja branch of the Nigerian Bar Association and civil society organizations, staged a work out after their demands for postponement of the public hearing on proposed amendment to the Land Use Charge.Chairman of the branch, Adeshina Ogunlana, said they opposed the constitution and holding of the public hearing on the ground that stakeholders had no access to copy of the amendment.Mr. Ogunlana called for extension of the hearing to allow stakeholders read through the document and make meaningful contributions.