In this our times

By Chris Otaigbe

Lagos was greeted with some level of relief on August 5, 2020, when the Babajide Sanwo-Olu-led government decided to repeal his predecessor, Akinwunmi Ambode’s Land Use Charge (LUC) Law.

Itself, a repeal of the 2001 LUC, Ambode’s LUC, which was enacted on 29th January 2018, to provide for the consolidation of Property and Land-based charges and make provisions for the levying and collection of Land Use Charge In Lagos State; otherwise referred to as the Land Use Charge Law of Lagos State, 2018 (the “LUC Law”).

Similar to the 2001 law, the LUC Law provides for a unified ‘Land Use Charge’ which consolidates all property and land-based rates and charges payable under the Land Rates Law, Neighbourhood Improvement Charge and all Tenement Rates; and “provides that such other rates shall cease to apply to any property on which land use charge has been levied.”
Unlike the 2001 law, the LUC Law goes a step further to repeal the Land Rates Law and Neighbourhood Improvement Charge Law, as well as the Land Use Charge Law, 2001 thereby creating a clearer regulatory framework for land-based rates and charges within the state.

Some of the properties exempted from payment of that Land Use Charge included:
Property owned, occupied and registered in the name of the religious body and used exclusively as a place of worship or religious education; Public cemeteries and burial grounds; unlike the 2001 law, which applied to both public and private cemeteries; All palaces of recognized Obas and Chiefs of Lagos State; unlike the 2001 law, such property will lose its exempt status if it is leased to private entities for revenue generation. What could be termed a radical and daring departure from the 2001 LUC, Ambode’s Law insisted that ‘Family compounds’, once exempted under the 2001 law, were not to be exempted from the properties list.

The LUC Law provides that ‘owners or occupiers of a lease’ are liable to pay Land Use Charge. The law also identifies both occupiers of leases of less than 10 years and occupiers of leases of 10 years or more as liable to pay Land Use Charge.

This was a notable change from the 2001 Land Use Charge Law, which made this an owner liability. ‘Occupier’ is defined to include both lawful and unlawful occupiers of the whole or part of property, and only excludes lodgers (being licensees).
Where Lagosians began to kick against Ambode’s LUC, at the time, was in the calculation of Land Use Charge.

Similar to the 2001 Law, the LUC Law calculated Land Use Charge by multiplying the market value of the property (i.e. the sum of land value and building development value) by the Annual Charge Rate.

Unlike the 2001 Law, market value under the 2018 LUC Law was to be determined by professional valuers appointed by the Commissioner of Finance. Of course, the fear by Residents and Property Owners, was that this could be subject to abuse and corruption since it is how much the Valuers say your is worth, is what would be recognized as its monetary value by the state under its LUC.

The, now repealed, LUC Law also included a new ‘Relief Rate’ which was applied to the market value and charge rate. A General Relief Rate of 40% was applied in calculation of Land Use Charge.