The combination of all property and land based rates and charges payable under Lands Rates, Neighborhood Improvement Charge and Tenement Rates Laws make up the Lagos State Land Use Charge (LUC) which derives its legitimacy from the Land Use Charge Law No. 11, of 2001. The LUC was designed in order to help government generate more needed revenue to develop the state in the light of increasing demand for the provision of urban and rural infrastructure and other expenditures.
Facts #1
The LUC law does not apply to all properties in the State.
Properties exempted from the operation of this law are government-owned properties, and other properties used for public, religious and charitable activities.
NB:- However, this exemption will only be granted where an application for exemption is made to the State Commissioner for Finance.
Facts #2
Liability:- The charge is imposed on the owner of a property.
#2.1:- Where the owner is not in possession of the property, the LUC law authorises the collecting authority to appoint the occupier(tenant) to be assessed with and pay for the tax; the tenant is in turn also authorised by the law to offset such a payment from monies that may be due from the tenant to the owner of the property.
#2.2:- There is thus an indemnity in favour of the occupant (tenant) against the owner. Where a property owner did not receive the First Demand Notice, the Lagos state government advises that complaints be registered through any of their customer service channels.
#2.3:- All claims of non receipt of First Demand Notice will be checked against their proof of delivery of all bills. The cost of assessment is free to property owners; they are not expected to pay for assessment of property. The amount charged is not negotiable. However, if payment is made within 15days of the delivery of the demand notice, a discount of 15 percent is applicable.
#2.4:- In cases where property owners receive Land Use Charge Bill for the first time, yet they are being asked to pay arrear, demand notices issued with arrears are reviewed against proof of delivery of the Land Use Charge demand notices on such properties for the previous year(s) for necessary correction.
#2.5:- In a situation whereby the property owner received the Tenement rate demand notice and has made payment before receiving the Land Use charge demand notice for the first time, the amount paid should be deducted from the Land Use Charge (if the Land Use Charge is higher than the Tenement rate,) then pay the outstanding balance. All evidence of payment including payment of Tenement rate should be forwarded to their office. It is noteworthy however, where Land Use Charge demand notice is received before any of the consolidated charges i.e. tenement rate, ground rent and neighborhood improvement charges, Land use charge should be paid as it covers all these rates and charges.
Facts #3
Assessment:- Properties in the same area and occupying the same size of land can be charged at different rates. For the purpose of Land Use Charge, properties are assessed individually. For example, in valuing any property(ies) having similar features, physical appearance, aesthetic features and age will determine the property class rate (i.e. high, medium, and low).
Another criteria also for charging different rates on any similar properties is the usage and status of occupation..
Note:- Property assessment is classified under 3 broad categories i.e. Commercial, Industrial and Residential usages.
*Commercial properties generally attract a rate of 0.394 percent of the assessed value.
*Industrial properties attract also a rate of 0.132 percent of the assessed value; however note that this will only be applicable where the property owner is the occupier of the property.
*Residential properties are categorized under three scenarios, all attracting different rates.
**A property solely occupied by the owner for residential purpose will be charged at a rate of 0.0394 percent.
** A similar property occupied by the property owner and tenant(s) or third parties will be charged at a rate of 0.132 percent.
**A similar property fully occupied by tenants or third party/parties for revenue generation, charged at a rate of 0.394 percent.
The LUC does not provide for installment payments particularly because 15% discount is granted for early payment. However, any amounts left unpaid are carried over to the next year with its full interest compliment.
For complaints and more clarification visit www.landusecharge.com or you go over to their office at Ministry of Finance at Alausa.
*Courtesy LASG
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