The Lagos State government has announced plans to generate N375 billion annually from Land Use Charge (LUC) payments from residents.
This initiative was detailed in the synopsis document for the EKO Revenue Plus Summit, themed “Unlocking New Revenue Streams for Lagos State,” set to be held on September 25th and 26th, 2024.
The document highlights Lagos’s expectation of attracting investments amounting to N15 trillion to address its three million housing deficit. Additionally, the government projects up to N1.5 trillion in revenue from various segments of the state’s property industry.
Further, the state plans to generate around N540 billion from the Lagos Diaspora Smart City project and an estimated N500 billion from the Eko Home Ownership Scheme. The document states, “LUC at an average of N500k per property from at least 750,000 houses registered on the portal will generate about N375 billion.”
Other significant revenue sources for the state in the property industry include:
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- The Lagos BuildIT Platform: This digitized platform, co-owned by the Lagos State Government (LASG), connects accredited professionals and suppliers in the real estate construction sector to prospective homeowners, aiming to solve longstanding delivery problems. The state plans to invest around N250 million in building, operating, and marketing the platform, while expecting revenues of up to N1.2 billion per annum from subscription fees estimated at N10,000 monthly.
- Eko Business Clusters: This project aims to generate N125 billion in revenues yearly through a N125 billion per annum public-private partnership (PPP) driven construction of 100,000 units in 52 major markets and business clusters in each of the FCDAs/LGAs. At a rent of N2.5 million per annum, this would result in a net inflow of N250 billion per annum. The projected revenue for the Lagos State Government (LSG) is N125 billion, based on a 50:50 ratio with joint venture partners.
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Earlier, the Lagos State Government announced that it generated N300 million from the Land Use Charge in the first four months of the year, out of the projected N700 million target for 2024.
In 2018, the Lagos State House of Assembly passed the Land Use Charge Law of 2018, setting the LUC payment rate by multiplying the market value of the property (i.e., the sum of the land value and building development value) by the Annual Charge Rate. The annual charge rate for owner-occupied residential property is 0.0394% of the market value of the property
