The Lagos State House of Assembly, on Monday, 29 January 2018, passed the Land Use Charge Law, 2018 (LUCL). LUCL, with the Governor's assent, will replace the extant Land Use Charge Law, No. 11 of 2001.

LUCL applies to real and landed property in Lagos State, and seeks to consolidate all property and land based rates/charges into a single property charge. The Law sets the modalities for levying and collection of land use charge in Lagos State.

Highlights of the LUCL are provided below:

  • Each local government area in the State will be the collecting authority for land use charge. Such local government will be the only body empowered to levy and collect the land use charge areas within its jurisdiction.
  • Land use charge is payable on all property except those exempted under Section 12 of the LUCL. The exemptions include:
  1. Property owned and occupied by a religious body and used exclusively as a place of worship or religious education;
  2. Public cemeteries and burial grounds as well as property used as a registered educational institution certified by the Commissioner of Finance (the Commissioner) to be non-profit making;
  3. Palaces of recognized traditional rulers in the State; and
  4. Any property specifically exempted by the Executive Governor by notice published in the State Official Gazette.
  • Exempted property becomes subject to land use charge if the use of such property changes to one that does not qualify for exemption.
  • Land use charge payable on any property is arrived at by multiplying the market value of the property by the applicable relief rate and annual charge rate using the prescribed formulae.

The LUCL reflects the State Government's efforts to tackle the issue of multiplicity of property taxes and levies between the State and Local Governments, especially as the imposition of land use charge on a landed property implies that all other state laws that impose tax on properties would cease to apply to such landed property.

Businesses are encouraged to evaluate the LUCL and ensure full compliance to avoid incurring avoidable penalties in this regard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.