Monday, 5 February 2018

Land Use Charge Law, Fresh Controversy in the Offing As widespread Opposition may Await Decision

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The new land use charge law that is awaiting the assent of the executive in the state of Lagos may generate fresh controversy as the widespread opposition is said to be in the offing. If Indication emerging from the sector’s major players are anything to go by. The proposed law, which repealed the land use charge law 2001 and enacted land use charge 2017 and for connected purposes aimed at increasing the revenue generation base of the state by bringing more houses into its net

The 27-section bill harmonized Land Rates Law, Neighborhood Improvement Charge Law and Tenement Rates Law. The bill, if passed into law, will end all other rates on land except the Land Use Charge. Already passed by the Lagos State’s House of Assembly and awaiting the governor’s assent, the proposed law has stirred up the hornet’s nest following some provisions; stakeholders consider unfair to property owners.
Titled: “A Bill for a Law to Provide for the Consolidation of Property and Land-Based Charges and Make Provisions for the Levying and Collection of Land Use Charge in Lagos State and for Connected Purposes”,
Under the bill, “ the annual amount of the Land Use Charge payable for any Property shall be arrived at by multiplying the market value of the property by the applicable relief rate and annual charge rate, using the prescribed formular.“The land value and building value rates constituting the market value of the property shall be reviewed at least once every five years on the basis of information available to professional valuers and may vary from area to area.
According to the bill, the Land Use Charge will be payable in respect of property that is not exempted under Section 12 of the law. Some of the properties exempted from the proposed law include property owned and occupied by a religious body and used exclusively as a place of worship or religious education. Also exempted are public cemeteries and burial grounds as well as property used as a registered educational institution certified by the commissioner to be non-profit making.
In addition, the proposed law exempts any property specifically exempted by the Executive Governor by notice published in the State Official Gazette and all palaces of recognised Obas and Chiefs in the state. However, the law made it clear that an exempted property shall become liable for Land Use Charge if the use of such property changes to one that does not qualify for the exemption.
The repealed, law guiding the Land use charge (LUC) was introduced by the government of Governor Bola Tinubu and it generated serious criticisms and subsequently legal battles until the rates were reduced. Some of the critical issues were the formula the government used to arrive at the capital values of properties and non-involvement of registered estate surveyors in the process, who should determine the values, and/or arbitrary values ascribed to properties.

There were also concerns over the usurpation of local council’s statutory right in the collection of tenement rates and provision of amenities in the local council area. With state collecting all together, the decision on what should get to the local councils, as tenement rate has remained a big issue.

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