Berkeley Legal | Review of the Land Use Charge Law of Lagos State 2018
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16 Apr Review of the Land Use Charge Law of Lagos State 2018


Property taxation is a source of revenue for the Nigerian government. This paper seeks to identify some of key provisions of the law regulating property tax in Lagos State. The Land Use Charge (LUC) was introduced by Lagos state in 2001 as a replacement of Neighborhood Improvement charges, Tenement Rates and Ground Rent. The Land Use Charge Law of Lagos State (LUCL or the Law) was enacted in 2001 to regulate this change. The law was recently amended with a review of the LUC rates and other provisions.

The amendment was made with the aim of increasing government revenue, updating the outdated penalty sums inter alia. The minimum chargeable LUC for any property of any category per annum is N5,000 and the annual amount of LUC payable on any property is determined using the formula (Land Value + Building Development Value) x Relief Rate x Charge Rate (section 10 Land Use Charge Law of Lagos State – LUCL). It is yet to be seen how the modalities of the aforementioned formula/calculation will be implemented in practice as there is continuing uncertainty from stakeholders.

Upon the introduction of the new LUCL, we have enumerated some salient provisions of the Law.

Section 12 of the Law provides that properties owned by the following categories are totally exempt from payment of the new LUC;

  • Properties owned and occupied by pensioners of 60 years and above (this relates to a person who has retired from a pensionable office in Lagos State.
  • Properties owned and occupied by religious bodies and used exclusively as a place of worship or religious education,
  • Properties used as public cemeteries and burial grounds,
  • Educational institutions certified to be non-profit making,
  • Public or private libraries certified by the Commissioner to be non-profit making;
  • Any property specifically exempted by the Executive Governor by notice published in the State Official Gazette,
  • Properties belonging to the Lagos State Government and all Palaces of recognized Obas and Chiefs.

Sequel to the above, partial reliefs are available to other categories of property owners under the Law such as;

  • 20% for properties owned by non-revenue generating FGN agencies
  • 20% for properties owned by non-profit making organizations
  • 10% relief for properties of disabled persons
  • 10% relief for properties of persons of 70 years and above
  • 10% for properties aged 25 years and above; and
  • 5% for properties aged 12 years and above.

By virtue of Section 9, the owner or occupier of a property is directly liable to pay LUC where there is a lease for less than 10 years. Where the lease is for a period above 10 years, the occupier holding the lease is liable to pay LUC. It is important to note that the LUCL defines an occupier to include lawful and unlawful occupants of a taxable property which is a clear deviation of the provisions of the law that was enacted in 2001.

Section 15 empowers the LUC collecting authority to appoint an occupier of a taxable property as an agent of the property owner (the Landlord in most cases) for the purposes of collection and payment of the LUC. It further provides that the agent may claim indemnity from the landlord for LUC payments made on behalf of the property owner/landlord.

In addition, the law provides annual rates for the LUC which include both “Owner-Occupied Residential properties” (0.076%) and “Residential Properties without the owner in residence” (0.76%).

For the purpose of assessing the payable LUC on a property, Section 5 & 6 require the Commissioner to assess or appoint property identification officers, professional valuers and other necessary persons for the purpose of assessment of chargeable properties. The Law also provides that the land value and building development value rates of a property (market value) shall be reviewed at least once every 5 years on the basis of information made available by professional valuers and consultants.

However, pending such periodic reviews, the land value and building development value rates may be increased by the Commissioner in line with the rate of inflation. It is important to note that the basis for determining the proposed inflationary adjustments is not provided in the Law.

The Commissioner is also empowered to recommend to the Governor, persons qualified to assume the position of Chairman and members of the Assessment Appeal Tribunal. This is a tribunal set up for the purpose of assessing wrongly charged land use charges and we note that the Commissioner is also responsible for the LUC assessment.


Section 31 of the law provides that the charge payable in the event of default in payment within the period in the demand notice, shall be increased by the following percentages:

  • Between 45 & 75 days – 25%
  • Between 75 & 105 days – 50%
  • Between 105 & 135 days – 100%

The law also provides that the assessed property will be liable to enforcement, or even civil action, if payment is not made after 135 days.


As a result of complaints from the public on some of the issues discussed above and more, the Lagos State Commissioner of Finance at a public briefing announced certain discounts to the LUC rates. Some of the discounts include;

  • 50% reduction on the rates payable on commercial properties; and
  • 25% reduction on the rates payable on owner-occupied properties with third parties and Industrial Premises of manufacturing concerns.


He also announced an across board waiver of all penalties as stipulated by the law and the provision for payment of LUC installments.

Although it is unclear when and how these reductions will apply, given that they are yet to be passed into law, a downward review of the rates and penalties is proposed.

The government is set to generate revenue through the increased rates, however the LUCL 2018 raises questions of uncertainty and accountability, especially with the use of the funds to be generated via the charges.

The review of the LUCL is still inconclusive as the Lagos State government is currently in further review discussions with stakeholders. We envisage further dialogue between lawmakers and stakeholders with a view to providing more clarity on the application of this new law. We will provide any further material updates as appropriate.


The information provided in this article is for general informational purposes only and does not constitute legal advice. If you require specific legal advice on any of the matters covered in this article please contact