Following criticisms that have trailed the introduction of the
Land Use Charge Law, 2018 by the Lagos State Government,
professionals in the real estate industry have called for a review
of the entire legislation.
The Nigerian Institution of Estate Surveyors and Valuers, Lagos
Branch, suggested that the LUC 2018 should be anchored on the basic
principles of taxation, as this would ensure fairness, particularly
from the taxpayers’ point of view.
The Chairman, NIESV Lagos branch, Mr. Rogba Orimalade, stated
that the institution, out of concern for the citizens, had studied
the law, the methods, basis applied and the likely impact, and was
worried that property values had been adjusted upwards without
valuation.
He stated, “We will appeal to the government to conclude the
valuation exercise before adjusting assessment figures based on
valuation. For the sake of transparency and best practices, when
the valuation is concluded, a list should be produced and displayed
in each local government area for all stakeholders to see.
“This will reduce the perception of arbitrariness and increase
compliance. It makes it easier for stakeholders to compare their
assessments with those of neighbouring properties.”
He said estate surveyors, as custodians of physical assets and
managers of properties and facilities in the state, had articulated
key suggestions and grey areas with contradictory provisions in the
law, which it would be recommending to the government when they
meet.
“We are aware of government’s efforts to commence the
enumeration exercise in the state. Through this process, the
government will obtain the real values of the properties, while
also providing the necessary data on the housing stock in the
state. It is our opinion that after that exercise, more people
would have been brought into the tax net, thereby reducing the tax
burden on the few who presently are bearing the major brunt of the
taxes, through reduced charges,” he explained.
The Land Use Charge is a consolidation of the ground rent,
tenement rate and neighbourhood improvement levy by the Land Use
Charge Law of 2018, which was first enacted in 2001, and payable on
properties in the state.
Since the bill was signed into law on February 8, 2018 by
Governor Akinwunmi Ambode and launched on the 19th, it has received
varied opinions and criticisms from property owners and other
stakeholders in the state.
Residents of the Lekki peninsula had last week threatened to go
to the Lagos State Land Use Appeal Tribunal over the new demand
notices served on them under the re-enacted LUC.
The Lekki Estates Residents and Stakeholders Association, a
coalition of all residents associations along the Lekki-Epe Axis
from 1004 Estates to Epe, met and unanimously resolved that the
members would not pay the new charges, which they said were four
times higher than what they paid in 2017.
The Chairman, VGC Property Owners and Residents Association, Mr.
Olusegun Ladega, said residents find the new charges extremely
exorbitant and out of tune with their economic realities.
Ladega, who is also the Vice Chairman of LERSA, told our
correspondent that the charges were based on unrealistic and
arbitrary valuation of residents’ properties and that they had
commenced the process of documentation and had set up a committee
to take their case to the Lagos State Land Use Appeal Tribunal.
At a stakeholders’ dialogue forum organised by the Lagos Chamber
of Commerce and Industry to discuss the LUC on Friday,
representatives of the state government, property owners, estate
developers and members of the Organised Private Sector were divided
on the provisions of the law.
While the Commissioner for Finance, Mr. Akinyemi Ashade, tried
to explain that the new law by implication would have about 75 per
cent of property owners in Lagos paying about N5,000 annually as
the LUC, the President of the LCCI, Mr. Babatunde Ruwase, said the
country’s economic situation would not accommodate additional taxes
for taxpayers.
Ruwase requested that the implementation of the new LUC law be
put on hold because of the stakeholders’ complaints, while the grey
areas were sorted out, adding that some key provisions in the law
should be normalised in the interest of fairness, equity and
natural justice.
The 1st Vice President, Nigerian Institute of Building, Mr.
Kunle Awobodu, told our correspondent that on the surface, the law
appeared simple but a careful assessment showed some financial
implications on property owners and tenants.
According to him, if the economy is favourable, the law will not
have been so criticised by residents.
He said, “The present situation is not favourable for everyone.
Many tenants are finding it difficult to meet their daily needs and
many others have vacated their accommodation secretly, while still
owing their landlords. So, people see the LUC as a punishment
rather than a way of generating revenue for development.
“Tenement rate and other land use charges have been there but
were not being paid regularly so the state is trying to regularise
it and generate revenue but at a wrong time. It could have been
better received if there was general improvement in the income of
people; more people would have been willing to pay because it is
not a bad idea, but the timing is very wrong.”
Following criticisms that have trailed the introduction of the
Land Use Charge Law, 2018 by the Lagos State Government,
professionals in the real estate industry have called for a review
of the entire legislation.
The Nigerian Institution of Estate Surveyors and Valuers, Lagos
Branch, suggested that the LUC 2018 should be anchored on the basic
principles of taxation, as this would ensure fairness, particularly
from the taxpayers’ point of view.
The Chairman, NIESV Lagos branch, Mr. Rogba Orimalade, stated
that the institution, out of concern for the citizens, had studied
the law, the methods, basis applied and the likely impact, and was
worried that property values had been adjusted upwards without
valuation.
He stated, “We will appeal to the government to conclude the
valuation exercise before adjusting assessment figures based on
valuation. For the sake of transparency and best practices, when
the valuation is concluded, a list should be produced and displayed
in each local government area for all stakeholders to see.
“This will reduce the perception of arbitrariness and increase
compliance. It makes it easier for stakeholders to compare their
assessments with those of neighbouring properties.”
He said estate surveyors, as custodians of physical assets and
managers of properties and facilities in the state, had articulated
key suggestions and grey areas with contradictory provisions in the
law, which it would be recommending to the government when they
meet.
“We are aware of government’s efforts to commence the
enumeration exercise in the state. Through this process, the
government will obtain the real values of the properties, while
also providing the necessary data on the housing stock in the
state. It is our opinion that after that exercise, more people
would have been brought into the tax net, thereby reducing the tax
burden on the few who presently are bearing the major brunt of the
taxes, through reduced charges,” he explained.
The Land Use Charge is a consolidation of the ground rent,
tenement rate and neighbourhood improvement levy by the Land Use
Charge Law of 2018, which was first enacted in 2001, and payable on
properties in the state.
Since the bill was signed into law on February 8, 2018 by
Governor Akinwunmi Ambode and launched on the 19th, it has received
varied opinions and criticisms from property owners and other
stakeholders in the state.
Residents of the Lekki peninsula had last week threatened to go
to the Lagos State Land Use Appeal Tribunal over the new demand
notices served on them under the re-enacted LUC.
The Lekki Estates Residents and Stakeholders Association, a
coalition of all residents associations along the Lekki-Epe Axis
from 1004 Estates to Epe, met and unanimously resolved that the
members would not pay the new charges, which they said were four
times higher than what they paid in 2017.
The Chairman, VGC Property Owners and Residents Association, Mr.
Olusegun Ladega, said residents find the new charges extremely
exorbitant and out of tune with their economic realities.
Ladega, who is also the Vice Chairman of LERSA, told our
correspondent that the charges were based on unrealistic and
arbitrary valuation of residents’ properties and that they had
commenced the process of documentation and had set up a committee
to take their case to the Lagos State Land Use Appeal Tribunal.
At a stakeholders’ dialogue forum organised by the Lagos Chamber
of Commerce and Industry to discuss the LUC on Friday,
representatives of the state government, property owners, estate
developers and members of the Organised Private Sector were divided
on the provisions of the law.
While the Commissioner for Finance, Mr. Akinyemi Ashade, tried
to explain that the new law by implication would have about 75 per
cent of property owners in Lagos paying about N5,000 annually as
the LUC, the President of the LCCI, Mr. Babatunde Ruwase, said the
country’s economic situation would not accommodate additional taxes
for taxpayers.
Ruwase requested that the implementation of the new LUC law be
put on hold because of the stakeholders’ complaints, while the grey
areas were sorted out, adding that some key provisions in the law
should be normalised in the interest of fairness, equity and
natural justice.
The 1st Vice President, Nigerian Institute of Building, Mr.
Kunle Awobodu, told our correspondent that on the surface, the law
appeared simple but a careful assessment showed some financial
implications on property owners and tenants.
According to him, if the economy is favourable, the law will not
have been so criticised by residents.
He said, “The present situation is not favourable for everyone.
Many tenants are finding it difficult to meet their daily needs and
many others have vacated their accommodation secretly, while still
owing their landlords. So, people see the LUC as a punishment
rather than a way of generating revenue for development.
“Tenement rate and other land use charges have been there but
were not being paid regularly so the state is trying to regularise
it and generate revenue but at a wrong time. It could have been
better received if there was general improvement in the income of
people; more people would have been willing to pay because it is
not a bad idea, but the timing is very wrong.”
Read more https://nairalaw.com/lagos-land-use-charge-real-estate-professionals-call-for-review/