Lagos State Offers 15% Discount for Early Payment of Land Use Charge to Boost Compliance

The Lagos State government has introduced a 15 percent discount for property owners who pay their Land Use Charge (LUC) as outlined by the state's property ownership laws. This incentive is available only if the property owner voluntarily complies with the law and makes the payment before any enforcement actions are taken.

Abayomi Oluyomi, the state's Commissioner for Finance, revealed this offer during a meeting of the Parkview Residents’ Association in Ikoyi. He emphasized that the payment, which functions as a property tax, is essential for supporting Lagos State's infrastructure projects.

Oluyomi further noted that the government’s appeal for LUC payments comes in response to rising issues of property fraud, which have cost the state approximately N1.27 trillion over the past five years.

Despite this push for compliance, the state has not made any adjustments to the charge rates for different categories of properties. For example, owner-occupiers—residential property owners who live in their homes without tenants—are still required to pay 0.076 percent of their property's value as LUC.

As explained by Akinyemi Ashade, a former finance commissioner, the annual fee for this group is calculated as 60 percent of the property’s value multiplied by the 0.076 percent charge. For a property valued at N20 million, this results in a fee of N9,120 per year, or approximately N760 per month.

Despite this relatively low fee, Oluyomi expressed concern about the low level of compliance, particularly in affluent areas. To address this, the state government has hired 500 ad-hoc staff to raise awareness, starting in major areas like Lagos Island, Victoria Island, and Eti-Osa.

"So far, we have covered only eight of around 200 estates in these regions, but we are working to reach more before the end of the year," he stated. Oluyomi warned that if property owners continued to avoid paying, the government would begin publishing the names of defaulters.

In an effort to increase voluntary compliance, the state also plans to collaborate with professional organizations and financial institutions to hold workshops on the LUC, with legal enforcement being the last resort.

Earlier this year, the state government reported generating N300 million from LUC collections in the first four months of 2024. Ope George, Lagos State’s Commissioner for Economic Planning and Budget, mentioned this achievement during a press briefing marking Governor Babajide Sanwo-Olu’s second term in office. George expressed confidence that the state's 2024 budget target of N700 million from LUC collections is attainable.

The Land Use Charge, originally introduced by former Governor Akinwunmi Ambode, faced controversy and was delayed. However, in 2020, under Governor Sanwo-Olu, the Lagos State House of Assembly amended the 2018 Land Use Charge Law, which now requires property owners to pay the charge on any taxable property.