The Lagos State House of Assembly on 29th January 2018,
passed a Law 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”).
The LUC Law
repeals and replaces the Land Use Charge Law, 2001. 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,
Neighborhood 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
Neighborhood 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.
The following
properties are now EXEMPTED from payment of Land Use Charge:
a) Property owned, occupied and
registered in the name of the religious body and used exclusively as a place of
worship or religious education;
b) 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; unlike the 2001 law which applied to both public and
private cemeteries;
c) All palaces of recognized traditional
rulers in the state; unlike the 2001 law, such property will lose its exempt
status if it is leased to private entities for revenue generation.
d) Any property specifically
exempted by the Executive Governor by notice published in the State Official
Gazette.
NOTE: ‘Family compounds’, once exempted under the
2001 law, are not on the exempted properties list.
EXCEPTIONS
TO THE EXEMPTIONS
1.
It is very important to bear in mind that the fact a property has
been marked as exempt does not mean that it will remain exempt indefinitely.
2. An exempted property
becomes subject to land use charge if the use of such property changes to one
that does not qualify for an exemption.
3. Also, the use of word
‘cemetery’ in (b) above is now limited to only public cemeteries under the new
law, meaning that owners of private cemeteries will now be expected to pay LUC;
while private libraries will continue to be exempt under the new law in
addition to public libraries (on a condition that they must be certified to be
non-profit making by the Commissioner of Finance for Lagos State).
4. In addition, the exemption
for property owned by religious bodies has been limited to those used as a
place of worship or for religious education.
5. Where any exempt property
is leased out to private entities for revenue generation, they shall not be
exempt for purposes of the law. This may also include stadiums and/or religious
centers that are also used as event centers or receptions for a fee.
However,
the LUC imposed shall only be calculated to make it only apply to that part of
the year in which the property, or part of it, is not exempt.
NOTE: This exemption will
only be granted where an application for exemption is made to the State
Commissioner for Finance.
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