May 262013


Who is responsible for payment of Land Use Charge?
Who is exempted from the payment of Land Use Charge?
How is Land Use Charge calculated?

When the issue of Land Use Charges arises in Lagos State, lots of residents and even property owners don’t understand the intricacies surrounding the law.

According to the Lagos State Government, the Land Use Charge (LUC) is a consolidation of all land base rates and charges payable under the Land Rate Law, Neighbourhood Improvement Charge Law, and the Tenement Rate Law.
The Land Use Charge being a property tax in Lagos State serves as a source of revenue generation for the government, which enhances the provision of infrastructure and social amenities.

Who is responsible for payment of Land Use Charge?
The Lagos State Land Use Charge Law which was enacted back in 2001 clearly says that any occupier of a property is responsible for the payment of the charge, which can and should be refunded by the property owner. The amount payable is dependent on factors such as the type of property and its use.
Section 10 and 11 of the law states that the collecting authority (That is the Local Government Council Area) may declare any person, including occupier of chargeable property to be the agent of the property owner and such person will become liable for payment of the charge on behalf of the owner from the money due by him or becomes due by him for payment to the owner. The payment of the charge will become recoverable from the agent where the owner defaults in payment.
Section 11 states that the agent will be indemnified against the owner for such payment made by him. Hence, it’s the property owner that is responsible for the payment of the charge and where the tenant pays, such money should be refunded.

What if I didn’t pay in time or don’t pay at all?
Penalties for delayed settlement of the Land Use Charge in section 20 (of the law), with the amount payable as penalty depending on the length of period the payment is delayed.
Delay of between 45 to 75 days attracts 25% of the original charge payable.
Delay of between 76 and 105 days attracts 50% of the original charge payable.
Delay of between 106 and 135 days attracts 100% of the original charge payable.
After 135 days, the property becomes liable to receivership until outstanding taxes, penalties and administrative charges are fully paid.

Penalties put aside, a 15% discount is given to all charges if the bill is paid on time and before certain date which is usually stated on the bill.

Who are exempted?
Some properties are exempted from the payment of the Land Use Charge. Properties exempted include government properties, properties used for religious activities, charitable activities and other public properties.
It must be noted however, that this exemption will only be granted after application for exemption has been made to the Commissioner of Finance of Lagos State. He advices that legal counselling should be sought to specific situation when they arises.

How is LUC calculated?
Where a property is located has nothing to how Land Use Charge (LUC) is calculated. Nevertheless, the location of the property influences the charge since the location determines the market value of the property. The payable charge is always calculated in percentage of the value of the property.
According to the Land Use Charge website, a 5% increase in mile rate for Lagos State Land Use Charge became effective as of January 1st 2012. The table below shows the categories of properties, the old rate and the new rate.

Category Old Rate (%) New Rate (%) [5% increase]
Owner Occupied 0.0375 0.0394
Industrial, Educational and Third party 0.125 0.132
Commercial Revenue Generating 0.375 0.374



For instance, a residential property occupied by the owner with open market value of  N90, 000,000
Current open market value @ 50% of open market value adopted by LRC = 50% of 90,000,000 =   N45,000,000

LUC will be          0.0394% of 45,000,000                    =             N17, 730


  1. I want to believe that the occupier should pay the land use charge irrespective of who resides in the property.Thank you sir.

  2. Sir, the television and radio charges being damanded by lacal government. Is it not inclusive in the LUC?, or am i misinterpreting it?. Pls educate.

  3. Hello Sodiq,
    The TV & Radio Charges are Not inclusive in LUC.
    Those charges are purely for and collected by the Local Govt while the Land Use Charge is paid to the State Govt. Its a property tax.

  4. What if the owner of the property is dead and the estate is yet to resolve,
    How do I register this property being used as a religious place of worship and qualify for exemption

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