The Lagos State Government has revoked the Land Use Charge Act 2018 which increased property taxes levied on Real Estate in Lagos. Property taxes have now reverted to the pre 2018 rates.
The Lagos State Government has announced the reduction of land Use Charge to the pre 2018 charges.
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. 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.
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 for land use charges for 2017, 2018 and 2019 among others.
Here are the 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.
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 penalty charges reduced from 25% to 10%
- 75-105 days penalty charges from 50% to 20%.
- 105-135 days penalty charges reduced from 100% to 50%
- A 48% reduction in the Annual Charge Rates.
Definition Areas Before Now
- Owner Occupied Residential Property charges reduced from 0.076% to 0.0394%
- Industrial Premises of Manufacturing Concerns reduced from 0.256% to 0.132%
- Residential Property/Private School (Owner & 3rd Party) reduced from 0.256% to 0.132%
- Residential Property (Without Owner in residence) reduces from 0.76% to 0.394%
- Commercial property (Used by the occupier for Business Purposes) reduces from 0.76% to 0.394%
- Vacant Properties and open empty Land reduces from 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.
Meanwhile, property owners are expected to receive their 2020 LUC bills shortly and they are to leverage on the 25% early payment discount.