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Lagos 2018 land use law reaps whirlwind


An estate in Lagos.

If the Lagos State government expected mere screams or verbal darts fired at it by residents and property owners over the 2018 Land Use Charge Law, which has now been tagged obnoxious, it was clearly mistaken.

Not only have the vexed residents and property owners registered their opposition to the reviewed law in diverse ways and with all the strength they can muster, they are also vowing to sustain the tempo until the government puts on its thinking cap, reverts to status quo or becomes more realistic.

While they wait for that to happen, professional groups including the Nigerian Bar Association (NBA) and the Nigeria Employers’ Consultative Association (NECA), which has already described the law as a “bad law for a good state” are exploring legal and sundry options.


Not only are the residents and property owners alarmed at the mind-boggling figures that the government is demanding of them, they are also livid with the use of market value of the property as the basis to arrive at the appropriate land use charge.

Allegations of high-handedness, the application of the policy to vacant plots of land, and inflated rates of over 400 per cent have also contributed to irking the people the more, despite government’s spirited attempts to get the people to see otherwise.

Right now, whether the state has begun to misstep by targeting homeowners, and the super-rich with exotic property in choice locations like Lekki Peninsula, Ajah, Victoria Garden City, and commercial property in the metropolis with the crazy charges is a different kettle of fish, but what has come true already is the fact that protests and resistance to the new law are taking root.

In fact, many Lagosians are still not convinced, despite Governor Akinwunmi Ambode and his team’s explanations, clarifications that there were so many misconceptions and misinformation about the new rates, as the law was a progressive enactment duly made by the state House of Assembly, and handed over to the executive for implementation, in the overall interest of the people.

Also, in spite of the overtures made by the government, including a reduction in the rates and waiver of penalty for late payments across board, some stakeholders are of the view that this was not far-reaching to stop their protests.

In the review last Thursday, rates payable on commercial property were reduced by 50 per cent, while the charges for owner-occupier with third party, including industries and manufacturing concerns got a rebate of 25 per cent. Tax credits were also given for land use charges already paid, in addition to the introduction of installment payment system.  

It would be recalled that the law, recently reviewed by the state Assembly and signed into law by Ambode on February 8, 2018, is a merger of all property and land- based rates and charges. The new law is also a consolidation of ground rent, tenement rate, and the neighbourhood improvement levy.


This charge is payable annually in respect of real estate property in the state, which means owners and occupiers holding a lease to a property for 10 years or more, are now liable to pay the annual LUC invoice charged.

Amount payable is expected to be made from January 1 of every year, and can be calculated by multiplying the market value of a property by the applicable relief rate (RR) and the annual charge rate (CR).

Upon receiving a notice or not, the new law makes it possible for owners to calculate their charge, and enables prompt payment, which allows them to benefit from a 15 per cent discount for early payment, applicable to payments made within 15 days of receipt of demand notice.

While issues such as its capacity to further incapacitate and impoverish residents; bring about inflation; trigger rent increase; bring about negative returns on investments and lower property development in the state have arisen, the state government is strangely of the belief that the benefits out-weigh whatever issues that may be thrown up.

Among other things, the LUC will enable the government to improve on service delivery; increase internally generated revenue (IGR), and cause the state not to depend solely on federal revenue.

It is also believed that it would ensure that all economic activities on real estate give a return to the government for the sole purpose of improving the living conditions of residents.

Additionally, the government says the LUC has been reviewed to enable self-assessment, which means property owners can now make their own calculations and know their rates with the help of professional valuers.

Furthermore, the new law also establishes an Assessment Appeal Tribunal (LUCAAT), which is authorised to adopt the use of Alternative Dispute Resolution (ADR) in resolving disputes concerning LUC demand notice, provided the appeal is lodged within 30 days after the receipt of the demand notice, should any property owner be unsure of his or her LUC bill or assessment.

Under the new law, property are assessed individually. For any two similar property, the physical appearance, aesthetic features and age will determine the property class rate (high, medium, and low) to be adopted in its valuation. Property assessment is classified under three broad categories such as commercial, industrial/educational and residential usages.

The state government has also made available some exemptions, which means that after some years of paying the LUC, a property owner may fall in the category of those, who do not need to pay LUC anymore. This exemption applies to pensioners of 60 years and above, who are owners and occupiers of the property.


Other property exempted include, property used for public and religious activities; property used as registered educational institutes and charitable activities; public cemeteries and burial grounds, and all palaces of recognised obas and chiefs.

Similarly, the state’s Ministry of Finance, the supervisory organ in charge of the scheme has engaged professional surveyors and valuers, who in the next six months will visit various properties to get accurate data for valuation that will be used as the basis for billing for the next five years. Owners and occupiers are expected to provide the officials with valid documents to help with the valuation.

Commercial property generally attract a rate of 0.761 per cent of the assessed market value, and industrial/educational property were assessed at a rate of 0.255 per cent of the assessed value. Assessments of residential property are categorised under three scenarios, which attract different rates.

A property solely occupied by the owner for residential purpose will be charged at a rate of 0.076 per cent, while a similar property occupied by the property owner and tenant(s) or third parties, will be charged at a rate of 0.255 per cent.

The third scenario/category is an investment property fully occupied by tenants or third party(ies) for revenue generation, charged at a rate of 0.761 per cent.

Furthermore, various reliefs have been made for owners and occupiers with 40 per cent general relief; 10 per cent for owners and occupiers of 70 years and above; 10 per cent for property owned by persons living with disability, and 10 per cent for property that are 25 years old; a five per cent relief for property occupied by their owners for over 12 years; a 20 per cent relief for non-revenue generating federal and state government property, and 20per cent partial relief for non-profit making organisations.

But contrary to government’s argument that the LUC has not been reviewed since 2001, facts available show that the rates were actually reviewed in 2003, 2008 and 2012, with marginal increases.


The Lagos Branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), which claimed it was not consulted by the state government on the issue, insists that, “Nothing has changed either before, or during the re-enactment of the law to change our position that the formula being used is what we don’t understand. It beats our imagination. We don’t know how they come about this formula being used to levy people.”

Chairman of the branch, Olurogba Orimalade said: “We did make our position known that there has to be clarity, especially to the professionals that it is their discipline and their training to be advising government on how the levy should be made.

If the valuers and institution itself were not involved, or were not carried along properly in arriving at the formula, then I think it raises a lot of questions on the process.

All over the world, including the United Kingdom, there is no law that has to do with land administration and matters that you will not consult the Royal Institution of Chartered Surveyors (RICS). That government could roll out something as fundamental as this without consulting us is not proper.

Among those agitating for a total review of the new policy are the Organised Private Sector (OPS), which comprise of the Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industry (LCCI), NBA, real estate investors and developers, landlord and resident associations, community development associations and civil society organisations.

Others are the Nigeria Employers’ Consultative Association (NECA), the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), the National Association Small and Medium Scale Enterprises (NASME) and the National Association of Small Scale Industries (NASSI).

Director-General of NECA, Mr. Olusegun Oshinowo, who commended Ambode for his good works and making Lagos a model for good governance, however, contended that, “sensitivity and humanness, which is part of good governance, is missing in the recent amendment of the land use charge law.

His words: “The new charge is, thus, highly insensitive and inhumane to say the least. It is, therefore, unacceptable to organised businesses. The law is not acceptable and the organised private sector (OPS) will not stand hands tied up to celebrate impunity and cheer disdain. It will fight this law by social resistance and any other legitimate means at its disposal.”


Only last week, members of the Nigerian Bar Association (NBA), Ikeja branch protested against the increment. The lawyers  marched from the Bar Centre of the Ikeja High Court to the Governor’s Office in Alausa, carrying a banner and various placards which inscriptions spoke volumes about their displeasure.

Chairman of the Lagos NBA, Adesina Ogunlana, who was joined by leaders of civil societies and non-governmental organisations, wants Ambode and the lawmakers to suspend the application of the law.
Even after the state government announced a reduction of the rates, NBA insisted on the repeal of the new law.

The MAN on its part alleged that the sudden rise in land use charges in the state could lead to the collapse of the already burdened manufacturing sector.

Its president, Dr. Frank Jacobs said: “Stakeholders in the manufacturing sector were not carried along adequately before the execution of the policy as the sector is already contending with a lot of challenges.

“One of the challenges of this policy is that if allowed to stand, other states in the country will soon begin their own increment of the land use charges,’’ he said.

The MAN president added that the increase, if not reversed, would also make the cost of finished commodities to be too exorbitant for Lagosians to afford.

Also, the LCCI through its president, Mr. Babatunde Ruwase, requested that the implementation of the new land use charge be put on hold, while the grey areas are being sorted out.


According to him, some key provisions in the law need to be fine-tuned in the interest of fairness, equity and natural justice.

He stressed that the law stipulates that some conditions should occur before the implementation, which includes that the commissioner may appoint property identification officers, professional valuers for the purpose of implementing the law, that the value of the annual charge rate will be set by the commissioner, subject to the approval of the House of Assembly, and published in the state’s official gazette.

Ruwase pointed out that there is no evidence that these conditions have been complied with, adding that the spirit of this provision was to get the buy in of the stakeholders before implementation, as well as, to adequately disseminate information to critical stakeholders.

While noting that one of the key tenets of democracy is inclusiveness, participation and dialogue, he commended the state government for being receptive to dialogue.

“As the business community, we appreciate what the state government has been doing, especially the investment in infrastructure and security. We are therefore willing and ready to pay our taxes. Indeed, over 90 per cent of the current IGR of over N300b generated in the state is coming from the private sector,” he said.

Before last week, the state government met with stakeholders, including the media, OPS and business moguls to explain the new law..

The state Commissioner for Information and Strategy, Mr Kehinde Bamigbetan, said there were so many misconceptions and misinformation about the new law, adding that the law was a progressive enactment duly made by the House of Assembly, and handed over to the executive for implementation, in the overall interest of the people.

He specifically dismissed the figures being bandied about, saying many of the calculations were based on arrears of many years of non-payment.

“The fact is that this law took a long process to be made. It started as a bill and went through the first reading, second reading, public hearing to which all stakeholders were brought together to debate it and some of the reliefs we have seen were part of the debate expressed by the stakeholders about the need to protect the vulnerable segment of the society. Having made the law, the Lagos State House of Assembly has handed it over to the executive to implement.


“The second important part is that a lot of reliefs have been built into the law, but many people are confusing arrears with the actual figure. If you see those figures, ask whether they are for one year or are arrears of several years of non-payment.

The humongous figures that are being bandied around particularly on the social media relate to the arrears of many years of non-payment, which are computed together,” Bamigbetan said.

“Under the old law, the LUC rate was totally inaccurate and retrogressive, which deprived the state of keeping track of all economic activities that relate to land in Lagos State,” according to the Commissioner for Finance, Mr. Akinyemi Ashade.

“For people saying the use of market value should not be the basis for deriving the LUC rate, we ask, what better application should be used? The cost of building houses varies according to area, so each property needs to be valued according to its location, in order to achieve a standardised rate for everyone. That is progressive and rational,” he said.

Responding to fears expressed by tenants that the new law might force landlords to increase rent, Ashade said aside the fact that the Lagos State Tenancy Law 2011 was still in force, the incidence of payment for land use charge under the new law is on the landlord and not the tenant.

Giving a breakdown of the reduction, Ashade said for commercial property owners, who were mostly affected by the amended law, a property valued at N20m for instance, which was earlier billed N91, 200 will now pay N45, 600 per annum as a result of the 50 per cent discount, while property occupied by owner, third party and property used for industrial and manufacturing purposes will now pay N23, 040 per annum on a property valued at N20m as against the earlier N30, 720 based on the 25 per cent discount.

On owner-occupied property, the commissioner explained that for a property valued at N20m, only N7, 752 will now be paid per annum, as against N9, 120 earlier demanded based on the 15 per cent discount. 

He said: “Other rates and reliefs, apart from the ones stated above, will remain unchanged and will be implemented as stipulated by the law. Owners of property across all categories will now be allowed to make payments by installments. This will help to reduce the burden of taxation on our citizens.

For now, tempers are still high to conclude how this matter would be resolved But one thing to take home is that the Lagos State government must have learned some fresh lessons –Not to take Lagosians friendliness for granted!

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Lagosland use law
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