The Lagos State government has introduced a 15 percent incentive for property owners who pay their Land Use Charge (LUC) promptly and comply with the state’s property laws.
This incentive is part of an effort to encourage voluntary compliance and boost state revenue for infrastructure development.
Speaking at the Parkview Residents’ Association General Meeting in Ikoyi, Abayomi Oluyomi, Lagos State Commissioner for Finance, explained that the LUC serves as a property tax crucial to supporting the state’s development projects. However, the 15 percent discount is only available to property owners who make early payments before the state begins enforcement actions.
Oluyomi highlighted that the appeal for LUC payment is a response to growing concerns over property fraud, which has cost the state an estimated N1.27 trillion in the past five years. Despite the introduction of the incentive, the state has not yet adjusted the value of the charge for different categories of properties. Residential property owners, for example, who live in their homes as owner-occupiers, continue to pay 0.076 percent of the property’s value as LUC.
Former Lagos State Commissioner for Finance, Akinyemi Ashade, previously explained how the LUC is calculated for this category of property owners. For a house valued at N20 million, 60 percent of the value (N12 million) is multiplied by 0.076 percent, resulting in an annual fee of N9,120, which equates to N760 per month.
Despite the relatively low rates, Oluyomi expressed concern over the low compliance level, particularly in highbrow areas like Lagos Island, Victoria Island, and Eti-Osa. To address this, the state has hired 500 ad-hoc staff to raise awareness about the LUC. So far, eight out of 200 estates in these areas have been visited, with plans to reach more by year’s end.
To increase compliance, the state government also plans to collaborate with professional bodies and financial institutions to hold workshops on the LUC, promoting voluntary payment before resorting to legal enforcement. Failure to comply could result in the public naming of defaulters.
Earlier this year, the Lagos State government announced that it had generated N300 million from the LUC in the first four months of 2024, with hopes of reaching the N700 million projection in the 2024 budget, according to Ope George, Commissioner for Economic Planning and Budget.
The Land Use Charge, originally introduced under former Governor Akinwunmi Ambode, faced initial controversy. However, an amended version of the law was passed in 2020 under Governor Babajide Sanwo-Olu’s administration, making property owners liable for the charge on taxable properties.