Insights into the Land Use Charge Law of Lagos State, 2018


The Land Use Charge Law of Lagos State (LUC 2018) imposes the land use charge on properties in Lagos state. It is a property tax. A property tax is a tax levied on real estate or land. Property taxes in Nigeria include capital gains tax, stamp Duties tax, ground rent, land use charge, tenement rate

  • Land use charge is a tax levied by the state government on land owners for the use of the land.

Old Law

  • The land Use Charge Law of Lagos State 2001 (LUC 2001) was enacted to harmonise and consolidate the collection of tenement rate, neighbourhood improvement charge and ground rent in Lagos state.

New Law

  • The land Use Charge Law 2018 repealed LUC 2001. It also repealed the Neighbourhood improvement Charge law and the Land Rates Law of Lagos State.
  • The LUC 2018 vests the responsibility for payment of land use charge on owners of property or occupiers of leases less than 10 years. Occupiers of leases ten years and above are also liable to pay land use charge.
  • Occupier is defined to include both lawful and unlawful occupiers, with the exception of lodgers.

Reliefs Provided

  • The Law provides a general relief of 40% of the value of the property for all properties. The law provides further specific reliefs for the following categories of persons:  100% for pensioners;
     5% for long occupation of property by owners (12 years);
     10 percent for aged persons (70 years & above);
     10% for properties aged 25 years and above;
     10% for persons with disability who are owner-occupiers;
     20% for non revenue generating property.
     15% for early payments (within 15 days of receipt of demand notice)
    Exemptions Provided.
  •  Property owned by a religious body and used exclusively as a place of worship or religious education.
  • Public cemeteries and burial grounds.
  • Property used as a registered educational certified by the Commissioner to be non-profit making.
  • Property used as public library or private library 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.
  • All palaces of recognized Obas and Chiefs in the state.
  • Any property specifically exempted by the Commissioner by notice published in the state official gazette.
ALSO READ   Legal Implications of the COVID-19 Vaccine: A Breach of Human Rights?

Responsibility For payment

  • The LUC 2018 extends the responsibility for payment of land use charge to occupiers of leases. Land use charge is therefore both an owner and occupier charge in the light of the LUC 2018.


  • The LUC 2018 consolidates all property taxes in Lagos state. The law however fails to make a clear distinction between owners and occupiers for payment purposes. Section 9(1) provides that the owner of a property or occupier of a lease of less than 10 years is liable to pay the land use charge, while section 9(2) simply provides that the occupier holding a lease of less than 10 years is liable to pay the land use charge, without mention of the owner.
  • This can be interpreted to mean that with regards to leases 10 years and above, only the occupier is liable to pay land use charge; while the owner or occupier could be liable in respect of leases less than 10 years old, depending on who is in occupation.
  • It could also be interpreted to mean that either the owner or occupier of a property is liable to pay the land use charge both for leases below 10 years and for leases 10 years and above.
  • In any case, the intention of the draftsmen is quite vague. What is certain however, is the extension of persons liable to be charged to occupiers of leases for periods below 10 years, 10 years, and above 10 years.
  • One contentious area in the LUC 2018 is the usurpation of the constitutional powers of the Local Government to assess, levy, and collect tenement rates as provided in Section 7(5) and Item 5(j) 1999 Constitution.
  • In our view, the above powers of the Local Government cannot be legislated away by the Lagos State House of Assembly. The provisions of Sections 3, 5, 6 10 & 14 of the LUC 2018 are therefore contrary to the provisions of the Constitution.
  • A civil action has been commenced at the Lagos State High Court seeking to declare these contentious sections of the LUC 2018 null and void. We eagerly await the decision of the Court.
  • The Lagos state Government has commenced enumeration, capturing and valuation of all billable properties in the state for the purpose of land use charge. The exercise has commenced and will end on 31st August 2018.
ALSO READ   Legal Implications of the COVID-19 Vaccine: A Breach of Human Rights?

Recent Review of the Land Use Charge Law 2018

  • Following criticisms from various quarters on the high rates and stiff penalties of the Land Use Charge 2018, the Lagos State Government announced at the meeting of its Executive Council on Wednesday, March 14, 2018 that sequel to dialogues with stakeholders such as the Organised private sector, Nigerian Bar Association, Real Estate developers and other professional groups, it has resolved as follows

 In addition to the previously granted reliefs, the following reliefs are granted:

 Commercial property owners will now enjoy a new 50% discount.
 Property occupied by owner, and third party, and property used for industrial and manufacturing purposes will now enjoy a further 25% discount.
 Owner occupied property will enjoy a 15% discount.
 The penalty for late payment has been waived completely.
 Introduction of instalmental payment system.

  • The Executive Council also resolved to forward the following regulations to the Lagos State House of Assembly for review and passage:

 The regulation for review of applicable rates and regime of reliefs on categories of properties pursuant to the Land Use Charge Law.
 The Regulation for a framework for self assessment.

  • This has to a large extent reduced the harsh effect of the LUC 2018 on property owners and occupiers. Property owners and occupiers will therefore have less difficulty complying with the LUC 2018.

Omonigho Churchill Esq
Ijewere & Co (Chartered Tax Advisers)
Lagos, Nigeria


  1. The Land Use Charge Law is a veritable source of Revenue for developmental purposes by the Lagos State Government and should be left alone irrespective of the Constitutional provision as stated by the writer. However, the Local Governments gave consent to the Lagos State Government to collect the revenue on their behalf for mutual benefit. Hence, the Land Use Charge Bill indicates the name of the Local Government the property is situated to allow for sharing revenue between the State and the Local Governments.
    The Constitutional provisions cannot be said to have been violated, if Local Governments consented to the State to apply a more effective and efficient way of collecting Tenement etc. rates which in the past were going into private pockets, and was a subject of arbitrariness by local government officers.
    I can affirm that Property owners would not wish to go back to the old ways. I have a self occupied property in Lagos State at Ikorodu West LGA. The Ikorodu West LGA presented a 5,000 naira tenement rate for the first time and I paid into a designated account. The next year, the same Ikorodu, West LGA presented a bill of 25,000 naira for the same small apartment. Then, my agent parted with 10,000 naira and another 5,000 naira which was paid into an account different from that of the previous year. It was clear, the change of Chairman or Treasure equally changes the account into which bills are payable.
    At the introduction of the Land Use Charge, and my property was enumerated, measurement taken of actual built up size and total land space occupied, the calculated annual Rate by the 2001 Law was less 1,300 naira. If I pay within 30days of the presentation of the Charge, I enjoyed 10% discount which is clearly written on the Bill. After four years of prompt settlements, the Commissioner of Finance wrote to thank and appreciated me for the payments.
    Before the advent of the Land Use Charge Law, paying Tenement etc. by Local Governments were big nightmare every year. All these arbitrary and fraudulent bills were reduced to one, paid direct into a central account through the banks and receipt issued on-line made things easy. The Lagos State Land Use Law introduce in 2001 is a blessing to Lagosians. Any attempt by either the Courts or any agitation will introduce chaos and would a return to the fraudulent activities of Counsel Officers. The Local Government Counsels are better off with the Land Use Charge in terms of real revenue accruing to the Counsels and less trouble for the Tax payers.
    The ambiguity as to who should pay the Tax in the 2018 Law is clearly a submission by the Executive and the Legislature (who are themselves property owners) to the pressure from Commercial Property Owners who do not wish to pay Taxes. The 2001 Law was very clear as to who should pay the Land Use Charge. The Law also authorized the occupier to pay the Land Use Charge at the expense of the Property owner and deduct same from rent payable to the property owner. Therefore, Section 9 (1) and (2) are a clear deviation from the nom to give room to Land lords to abdicate their responsibility to pay taxes on incomes generated from their properties. The above Section pave for Commercial Property Owners to invade taxes and lay the burden on the hapless Tenants.
    Whatever review that is done on the Law should include a revision of Section 9 (1) (2) to laying firmly the responsibility to pay the Tax on the Property owner.

  2. The Lagos State Land Use Charge Law, I think do not violate the Constitutional provisions as stated by the writer. Firstly, the right to collect Tenement Rates rest on Local Governments. Should individual Local Government in Lagos State under contract with the Lagos Government (as their agent) to use advanced technology to collect revenue and take a share out of the collect revenue as it is in this arrangement; it is clear, the State Government is acting as an agent of the Local Governments. Therefore, the collector as per the Constitutional provisions are the individual Local Governments. Secondly, the Constitution provided that, the State House of Assembly should legislate on the subject matter. The Lagos State Land Use Law is a Law of the State House of Assembly. Therefore, can determine rates chargeable, and mode of collection etc. That if any agitator is looking at the wordings of the Constitution, and do not read the situation with the combined effect of other lawful arrangement would end in futility. Those who came up with this arrangement were Lawyers of great repute and have taken several issues into consideration.


Please enter your comment!
Please enter your name here