THE re-enactment of the Lagos State Land Use Charge to Law replace the one enacted in 2001, was greeted with strident public outcry obviously due to misunderstanding of its provisions.

However, a detailed look at the Land Use Charge, LUC, Law (2018), which is the state government’s property tax, indicates that it is a consolidation of ground rent, tenement rate, and neighbourhood improvement levy.

According to state government officials, it is an annual charge rate expressed as a percentage of the assessed market value of the property and empowers the state government to vary between owner-occupied property and other property as well as residential property and commercial or revenue generating property.

This variation further includes property for physically-challenged persons and those who have been resident at the same location for at least 12 years, minors; retiree owners of property and occupiers on the one hand, and active owners and occupiers on the other. According to the Law, the annual charge rate to be applied to eligible property in Lagos State shall be as follows: owner-occupied residential property – 0.076 per cent per annum of the assessed property value, and owner-occupied pensioner’s property.

Exempted from from the Law are the state owned property, while chargeable property include industrial premises of manufacturing concerns at the rate of 0.256 per cent per annum of the assessed property value, residential property (owner and third party) at the rate of 0.256 per cent per annum of the assessed property value,  residential property (without owner in residence) at the rate of 0.76 per cent per annum of the assessed property value, commercial property (used by occupier for business purposes) at the rate of 0.76 per cent per annum of the assessed property value and vacant property and open empty land at the rate of 0.76 per cent per annum of the assessed property value.

Exemptions The Law also provides various forms of reliefs that are available to payers of LUC. The reliefs include general relief of 40 per cent (applicable to all property liable to pay LUC), and specific reliefs applicable to property owners and leases of 10 years and above for pensioners (60 years and above) which is 100 per cent for owner-occupied property, persons with disability 10 per cent for owner-occupied property. Others include aged persons (70 years and above) 10 per cent for owner-occupied property, age of property 10 per cent for property aged 25 years and above, long occupation by owners five per cent for 12 years and above, federal and other state government property 20 per cent for non-revenue generating property, partial relief under the LUC Law – 20 per cent for non-profit-making organizations.

To enjoy the available reliefs, payers will need to provide relevant documentary evidence to support their relief claims. All LUC paid within 15 days of receipt of Demand Notice will enjoy a timely payment discount of 15 per cent. The minimum LUC payable on any given property shall not be less than N5,000 irrespective of any LUC relief granted on the property.

The Commissioner for Finance is empowered to appoint Property Identification Officers, Professional Valuers and other persons as may be considered necessary for the purpose of assessing the charge applicable to a property. Category of property exempted from LUC includes property owned and occupied by a religious body and used exclusively as a place of worship or religious education, public cemeteries and burial grounds, property used as a registered educational institution certified by the commissioner to be non-profit making, property used as public library or as a private library certified by the commissioner to be non-profit making; any property specifically exempted by the governor by notice published in the State Official Gazette, and all palaces of recognized Obas and Chiefs in the state.

However, if any of the exempted property is leased out to private entities for revenue generation, it shall forfeit its exemption status as contemplated under the provisions of this Law. Offences and penalties Adesina Ogunlana What are the offences and penalties?

Any person who refuses or neglects to comply with any provision of this Law when required to do so by the Property Identification Officer or an assessor; any person who prevents, hinders, or obstructs any Property Identification Officer or an assessor in the course of lawful duty or  any one who removes, damages or destroys a Property Identification plaque on any property or building, commits an offence and shall be liable on conviction to a maximum fine of two hundred and fifty thousand naira only (N250,000) or to a maximum term of imprisonment for a period of three months or both.

Any person who incites another person to refuse to pay LUC; or b) incites or assists any person to misrepresent in any way the person’s chargeable property; commits an offence and shall on summary conviction be liable to a maximum fine of two hundred and fifty thousand naira only (N250,000) or to a maximum term of imprisonment for a period of three months or both.

The new LUC Law has equally established an Assessment Appeal Tribunal in each division of the state to treat all appeals and resolve any potential dispute.

Each tribunal shall consist of a chairman who shall be a legal practitioner of not less than 15 years post-call experience, a representative of the Attorney-Generalof the state, a registered town planner, a registered land surveyor, a registered estate surveyor and valuer, a representative of the Lagos State Valuation Office, a person with cognate experience in accounting and taxation, and  two persons from the private sector.

A person may make an appeal to the tribunal if aggrieved by a decision that the property which the person owns is a chargeable property, or that the person is liable to pay LUC in respect of such property, or any calculation of an amount which the person is liable to pay as LUC, and the Tribunal shall make such decision as it deems fit.

In resolving disputes arising from the provisions of the Law, the parties shall submit to a confidential mediation in an effort to resolve such disputes. However, where the mediation does not resolve the dispute within 45 working days of the first session or when the mediator declares an impasse, the mediation shall be deemed inconclusive and parties shall be at liberty to resolve their dispute formally at the tribunal or through any other lawful means.

Making clarifications on the Law in an interactive session with property journalists last week, Lagos State Commissioner for Finance, Mr. Akinyemi Ashade, said said the government has extended the period for tax payers to enjoy the 15 per cent discount in the reviewed Land Use Charge Law to April 14, 2018 to enable the implementation and enforcement of the new law, as well as allow many property owners to benefit from the discount.

Ashade who took time to clarify reactions on the new law, said under the old law, which had not been reviewed for over 15 years since 2001, the Land Use Charge rate was totally inaccurate and retrogressive and was depriving the State of keeping track of all economic activities that relate to land in Lagos State.

He said the Law, which was reviewed by the Lagos State House of Assembly and signed into Law by the State Governor, Mr. Akinwunmi Ambode, on February 8, 2018 has merged all property and land based rates and charges in the State. Ashade said: “There was an urgent need for the repeal, as the old law had not been reviewed for over 15 years, since 2001. Under the old law, the LUC rate was totally inaccurate and retrogressive.

This deprived the State of ability to keep track of all economic activities that relate to land in Lagos State. “The new law is a consolidation of ground rent, tenement rate, and neighbourhood improvement levy. This charge is payable annually in respect of all real estate properties 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. “Thus, the tenement rates law, the land based rates law, the neighbourhood improvement charge and all other similar property rates or charges, laws or amendments to any such property Laws shall cease to apply to any property in Lagos State as from 2018.

Nonetheless, all pending invoices, orders, rules, regulations, etc. under the 2001 repealed Law shall continue to be in effect until such obligations are discharged.” Vacant  properties Explaining the calculation of amount payable, the commissioner said that property owners can determine the amount by multiplying the market value of their property by the Applicable Relief Rate of 40 per cent and Annual Charge rate. “Upon receiving a notice or not, the new law has made it possible for owners to calculate their charge, and enable 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,” he said.

Responding to fears of 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.

He said the minimum rate was only increased from N1,200 it was in 2001 to N5,000, while there is provision for self-assessment and Assessment Appeal Tribunal under the new law. Larry E. Ettah, NECA president On vacant properties, Ashade said such would be treated based on owner-occupier and not as a commercial property, explaining that the target of government is to make commercial property owners to pay a little bit more.

Professionals, OPS, others criticise new Land Use Charge But criticisms have continued to trail the new Law with the Organised Private Sector, OPS, leading the opposition to the new charges. OPS, along with opposition political parties in the state, residents of highbrow estates in Lagos, business and professional associations, have vowed to resist the re-enacted Law which it said has led to 200 percent increase in Land Use Charge in the state. One of the opposition political parties, Action Democratic Party, ADP, described the increase in the land use charge by the state government as obnoxious, adding that the new levy would geometrically increase the level of hardship confronting residents of the state.

Otunba Oluyemi, President of the Yoruba Youth Agenda and a chieftain of the party noted that APC government is anti-people, and there is a need to resist this anti-progress agenda of Ambode and his capitalist backers. ADP members also argued that the increase would lead to an upsurge in rents paid by Lagosians and subsequently render many homeless.

They added that government exists for the people and people are not supposed to suffer in the hands of those who are serving them as a result of callous policies such as were being pursued by the government. The Nigeria Bar Association, NBA, Ikeja branch, expressed displeasure at the new Law which it argued, will lead to further impoverishment of over 17 million Lagosians.

It maintained that the poor economy of the country was already negatively affecting the people, and urged the governor to be sensitive in implementing policies that would positively affect residents of the state. Chairman of Ikeja branch of NBA, Mr. Adesina Ogunlana, said the governor was turning the state into a toxic environment and hell for its residents because of uncontrolled imposition of taxes. He said, “It is clear that if these tax regimes are allowed to stay, Lagos State would have been turned into a toxic environment and a living hell.

Even ordinarily in Lagos State, accommodation is not cheap and easily affordable. The governor should not hide under the umbrella of working to develop Lagos into a mega-smart city to kill Lagosians with ‘pharaonic taxes.’”President of the Nigeria Employer Consultative Forum, NECA, Mr. Larry E. Ettah, at a press conference last week, said, “The recent amendment of the land use charge law is a classic case of insensitivity, alienation and gross disregard of the current state of well-being of both corporate entities and residents.” Ettah said that in reality the new law expected property owners in Lagos State to pay at the very minimum, a monstrous, appalling and callous increase of over 200 per cent, and in some instances over 500 per cent in Land Use Charge. He added,“It is not as if the income of a property owner has gone up significantly to justify this outrageous law. More so, the real estate sector continues to wallow in deep recession with high vacancy rates.”

To compound matters, he said, “There is a repugnant and odious penalty payment ranging between 125-200 per cent if payment is not made between April and August.” NECA hinted that the organised private sector would do everything legal and legitimate including social resistance, to challenge this “unfair and unjustifiable law.” Also speaking against the new Land Use Charge Law, the Director-General of NECA, Mr. Olusegun Oshinowo, who commended Governor Akinwunmi Ambode for his good work and making Lagos a model for good governance, contended that “sensitivity and humaneness, which is part of good governance, is missing in the recent amendment of the Land Use Charge law in the state.

The new law will expect property owners in Lagos State to pay an increase of over 200 per cent in Land Use Charge even when the income of the property owner has not experienced significant increase to justify the charge. “There is, also, a penalty payment ranging between 125-200 percent, if payment is not made between April and August, 2018.

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 hand tied up to celebrate impunity and cheer disdain. It will fight this law by social resistance and any other legitimate means at its disposal.”

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