Land Use Charge “FAQ’S”

The Lagos state land use charge law was instituted on 22nd June, 2001 to replace the old tenement rate. The land use charge is designed to help the government generate additional revenue needed to develop the state in the light of increasing demand for provision of urban and rural infrastructures and other expenditure while a population that grows at an alarming rate doesn’t help matters.

However, after 14 years the implementation and the enforcement of this charge still raises dust. The modus operandum of the charge poses more questions than answers. It has generated controversies over the years and some Lagosians are still confused as to what the land use charge is really about.

Here is a run-down of the Frequently Asked Questions(FAQ) in relation to the land use charge:

Frequently Asked Questions(FAQ)

Who is liable to pay the land use charge?
The responsibility for payment of the Land Use Charge resides primarily with the property owner; however there is provision in the law establishing the charge, for payment to be made by the occupier who is then empowered to look to reimbursement of the charge from the property owner.

I cannot pay the penalty charges on the Final Reminder Notice since I did not receive the First Demand Notice. What should I do?
The Lagos state government advises that complaints be registered through any of their customer service channels. You can visit www.landusecharge.com for clarification or you go over to their office at;
Ministry of Finance, Block 12, Room 18,
Lagos State Government Secretariat,
Alausa , Ikeja
Lagos State, Nigeria.
Mobile no: 07028223074
However note that all claims of non receipt of First Demand Notice will be checked against their proof of delivery of all bills

Are property owners supposed to pay for assessment of property?
No. The cost of assessment is free to property owners.

I own an “empty land” , am I liable to pay?
Yes. Since, Land Use Charge includes all land based rates.

Is the amount negotiable?
No. However, if payment is made within 15days of the delivery of the demand notice, a discount of 15% is applicable.

Several properties are receiving Land Use Charge Bill for the first time, yet they are being asked to pay arrears. What are they to do about it?
Demand notices issued with arrears are reviewed against our proof of delivery of the Land Use Charge demand notices on such properties for the previous year(s) for necessary correction. Such cases should be registered through the complaints interface of the website; www.landusecharge.com, or through their help lines or e-mail, all available on their website.

Some property owners have paid Tenement Rate for the year before receiving Land Use Charge or vice versa, what happens in such a case to the Land Use Charge Notice?
In a situation whereby the property owner received the Tenement rate demand notice and has made payment before receiving the Land Use charge demand notice for the first time, the amount paid should be deducted from the Land Use Charge (if the Land Use Charge is higher than the Tenement rate,) then pay the outstanding balance. All evidence of payment including payment of Tenement rate should be forwarded to their office. However, where Land Use Charge demand notice is received before any of the consolidated charges i.e. tenement rate, ground rent and neighborhood improvement charges, Land use charge should be paid as it covers all these rates and charges.

What do I do with the receipt/ teller after payment?
In order to expedite the update of your payment into their records, LASG ask that you scan a copy of the teller and Lagos State government receipt issued upon payment and email them to: addresspayments@landusecharge.com, or text the details of payments to the designated hotlines found on their website. These details should include amount paid, Bank payment code, Name of Property owner and Address of property paid for.

What happens to any arrears?
Payment is to be made once and in full. However any amounts left unpaid are carried over to the next year with its interest compliment.

What happens to the discount/provisional penalty fee where the notice of Land Use Charge is dispatched / received late due to no fault of the owner of the house? 
All claims of late receipt of Land Use Charge demand notices are checked against their proof of delivery of such demand notices. Where this claim is verified in favor of the property owner, the property owner is reissued a new Land Use Charge demand notice which will enable him enjoy the discount available.

What is a Final Reminder Notice?
This is a notice sent after the first Demand Notice to any property owner whose payment has fallen within the penalty period but who has not paid their bill.

Why are the same type of properties in the same area and occupying the same size of land being charged different rates?
For the purpose of Land Use Charge, properties are assessed individually. For any two similar properties, the physical appearance, aesthetic features and age will determine the property class rate (i.e. high, medium, and low) to be adopted in the valuation of the property. Another reason for charging different rates on any similar properties is the usage and status of occupation. It is noteworthy that property assessment is classified under 3 broad categories i.e Commercial, Industrial and Residential usages. Commercial properties generally attract a rate of 0.394% of the assessed value. Industrial properties are assessed at a rate of 0.132% of the assessed value; however, this will only be applicable where the property owner is the occupier of the property. Assessments of residential properties are categorized under three scenarios which attract different rates. A property solely occupied by the owner for residential purpose will be charged at a rate of 0.0394%, while a similar property occupied by the property owner and tenant(s) or third parties will be charged at a rate of 0.132%. The third scenario/category is an investment property fully occupied by tenants or third party/parties for revenue generation, charged at a rate of 0.394%.

Can I pay my Land Use Charge in Installments?
The Land Use Charge does not provide for installment payments particularly since 15% discount is granted for early payment. However, any amounts left unpaid are carried over to the next year with its full interest compliment.

Can I pay to any bank?
No. There is a list of designated banks on the reverse side of your demand notice. It is also important to pay into the correct bank account as payment to wrong accounts invalidates payment.

Do I engage touts to assist me with my Land Use Charge bill?
There is no reason to engage the services of touts where all communication channels are open, as they strive to maintain customer satisfaction.

I paid my Land Use Charge last year but the payment has not reflected in this year’s assessment, what do I do?
You are advised to the present year’s assessment and visit their complaint office with proof of last year’s payment to effect reconciliation.

My neighbours have received their Land Use Charge bill, why have I not received mine?
There is no reason why you should not have received your bill. Please forward all request for bills through the complaints interface on their website. Your requests and complaints can also be made through any of their hotlines or via e-mail available on their website.

The demand notice I received is addressed to “Property Owner” should I pay this bill?
In instances such as these, please pay the assessed amount and then register your complaints through the complaints interface of their website to inform them of your revised details.

What is the Land Use Charge and is it legal?
The land use charge is a consolidation of all property and land based rates and charges payable under Lands Rates, Neighborhood Improvement Charge and Tenement Rates Laws of Lagos State. The Land Use Charge derives its legitimacy from the Land Use Charge Law No. 11, of 2001.

Who is a 3rd party?
3rd party refers to anyone other than the property owner that resides on the property. This also includes relatives of the property owner who are of taxable age.
Despite all, the land use charge intervention has failed to conform to best practice both in policy and administration. As a result, the reform has not ceased and even with the awareness may not still cease to generate controversies. It has enjoyed limited acceptability.
As for its success rate; I’ll leave the Lagos state government to determine that.

courtesy Lagos state government