Land use charge in lagos state. what it is and what its not part 1 (march 2018) – properties – nigeria static electricity definition physics


Sequel the the thread that made the front page last week, wherein I promised to create a topic to address the issue, I’ve decided to do so in series. On this thread, we would try to address critical issues regarding the LUC and how it affects you.

What is property tax? According to wiki: A property tax or millage rate[1] is an ad valorem tax on the value of a property, usually levied on real estate. The tax is levied by the governing authority of the jurisdiction in which the property is located

What is Tenement rate in Nigeria, we came to know the property tax as tenement rate, which could mean the same thing. In other country, they call it property tax, but in Nigeria, it was known as tenement rate. The local government do collect it prior to 2001 in Lagos State, Hence its a local tax by the local administration on all properties at the province or local level to generate income for the government, in oder to provide infrastructures.

What is Land Use Charge? As posited above, we had the tenement rate and some other property based taxes that are to be paid by owners of land (not tenants). Bola Ahmed Tinubu became Governor of Lagos State in 1999 and realized the poor collection of the tenement rate and inability of the local government to point out strategic programs that the funds were channeled to. Remember, we were under the military rule until 1999, hence the corruption was so obvious.

BAT then created the LUC, which unified the entire taxes to be paid on land as the Land Use Charge. The land Use charge is the combination of tenement rate, Neighborhood charge and Ground rent. Let me explain what Neighborhood charge and Ground rent means

Ground Rent: Remember the land use Act of 1978 vested the ownership of all Land to the State government, hence everyone is a tenant with the government for 99 years. Remember also that your C of O is only for 99 years max, hence the rent you pay Government annually is called Ground rent. Payable to the state government

The above 3 distinct taxes were harmonize by BAT as one and the responsibility of collection was placed in the hands of the state government, who will then spend the money on the entire state for the benefits of all. For instance, Instead of the local government chairman to collect tenement rate on a property worth N5 billion naira in Ikoyi and spend the money on frivolous things like boreholes etc the state government will collect and spend on meaningful projects spread across the 20LGAs and 37 LCDAs

The LUC has been there since 2001 and all forms of tenement rate was no longer collected after the unification. But many Nigerians do not know. Nigerians, I mean all of us, cos Igbo’s, Yoruba’s, Hausa, TIV, American, British, Lebanese, Indian, Ghanians etc own properties in Lagos. Many ous do not pay taxes at all on anything. This is the truth.Up till today March 3rd, many of us don’t even Pay at all, but we love to criticize the government.

Conclusion, LUC had been with us since 2001, but since we don’t pay, we have no idea that it exist. The Government of BAT and Fashola didn’t do much to enforce payment and since 2001 to amendment or increment and less than 300,000 properties pay LUC in Lagos State out of over 2,000,000 houses that we have in the Lagos State.

LUC is tax payable by a Landlord. The person who has money and decided to buy property with his money. The government will tax you and use the money to provide houses for others. Houses are not only for the rich. The poor too deserves to own properties.

I am opened to answering any Question at all, pertaining to the LUC. The various LASG officials are interested in how Lagosians feels about this subject, hence they paybvery serious attention to Nairaland, based on my discourse with them yesterday

(a) Property owned and occupied by a religious body and used exclusively as a place of worship or religious education; This means your churches and mosques or Shrines are exempted, but not a hospital built by a church and they charge patients thousands of Naira. Not Private Universities where they charge millions as School fees. Not event centres and halls owned by churches or mosques that people rent and paid income to the church

(b) Public cemeteries and burial grounds as well as property used as a registered educational institution certified by the Commissioner of Finance (theCommissioner) to be non-profit making; This doesn’t protect Private universities or Schools cos they are making profits. Burial grounds like Atan Cemetery, Ikoyi Cemetery, Ikorodu cemetery are exempted. But Victoria court cemetery, Ebony Vaults and Gardens and other private cemeteries are to pay Land Use Charge. They don’t allow you bury the dead for free, but you pay millions for burials, hence they’re to be taxed.

a)General relief of 40% (applicable to all property liable to pay LUC); This means that As soon as your property value has been determined, take out 40% of the value and you’re left with only 60% of the market value to be assessed for LUC. Worked example. A property located at Number 12, Ogudu road has been valued by Professional Estate Surveyor and valuer as say N10 Million naira (Land +Building) The law says that your N10million value goes down to N6million. It is on that N6million that you’ll be assessed. For annowner occupier whose property is N6million naira your annual land use charge will be about N15,000 for a whole year. Your LUC is less than amount you spend on fuel for 1 month

I.Pensioners (60 years and above)–100% for owner-occupied property: Your Father or Grandfather who owns a house and he’s a pensioner and also above 60 years, he pays nothing. If the property is in Ikoyi and worth N500, Million, Papa is 100% free from liability

II.Persons with disability–10% for owner-occupied property: In addition to the 40% instant reduction of your market value, if you’re disabled, you get additional 10%. Let me explain. Market Value is N10 Million, you get (40%+10%) relief. Hence, as a disabled, you’re left with 50% of the value of your property, which is N5 million. So the LUC for a disabled Owner Occupier is N12,800 for the whole year. Less than Dstv or Fuel money

III.Aged persons(70 years and above) –10% for owner-occupied property: This implies that your Father or Mother that are not pensioners but private citizens but own a house, they’ll get 10% in addition to the 40% automatic reduction. Same example above applies

Market Value is N10 Million, you get (40%+10%) relief. Hence, as an old man private citizen aged 70, you’re left with 50% of the value of your property, which is N5 million. So the LUC for a disabled Owner Occupier is N12,800 for the whole year. Less than Dstv or Fuel money