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Benconews Exclusive: Lagos Landlords Increase Rent As Ambode Increases Land Use Charge by 200%

Rents in Lagos have increased following the signing into law the newly passed land use charge law. Benconews.com can authoritatively reveal that some landlords in Lagos have given their tenants increment notice.

Speaking on a radio programme on Lagos Talks with Jimi Disu yesterday, a caller who simply identified his name as Tony said few days ago he was surprised to get an increment notice from his landlord with additional N50,000. And he added that when they (the tenants) tried to contact the landlord on the reason for the increment he blamed it on the newly passed law.

Another caller who goes by the name Seyi also said, he’s been contacted by his landlord’s lawyer over a possible increment.

“Just last week, my landlord’s lawyer contacted me over an increment in the rent and i was so shocked to hear that and i asked him why, he blamed it on the land use charge law, saying his client cannot bear the brunt alone,” he said.

Both the callers, and many others expressed their displeasure over the new law and called it ‘inhumane.’

Benconews.com also gathered that same practice and agitation is ongoing in many parts of Lagos.

Meanwhile, the Organised Private Sector, OPS, two days ago rejected the newly passed Land Use Charge Law of Lagos State, 2018, vowing to fight the law with every legal means at its disposal.

Speaking in Lagos, the Director-General of NECA, Mr. Olusegun Oshinowo while commending Governor Akinwunmi Ambode for his good works and making Lagos a model for good governance, , however, contended that “sensitivity and humanness, which is part of good governance, is missing in the recent amendment of the Land Use Charge law in the state. The new law will expect property owners in Lagos State to pay an increase of over 200 per cent in Land Use Charge even when the income of the property owner has not experienced significant increase to justify the charge.
“There is, also, a penalty payment ranging between 125-200 percent, if payment is not made between April and August, 2018. The new charge is, thus, highly insensitive and inhumane to say the least. It is, therefore, unacceptable to organised businesses. The law is not acceptable and the Organised Private Sector (OPS) will not stand hand tied up to celebrate impunity and cheer disdain. It will fight this law by social resistance and any other legitimate means at its disposal.”
Some other Lagosians have also expressed their displeasure over the law, one Mr. Akatikpo said: “Until the Tinubu hegemony and dynasty is dismantled in Lagos, you guys are making empty noise. The toll gate was increased and you all moped like mumu. You were all asked to come out and register your displeasure but nobody came out. Is it now that you’re realizing that the increase is disproportional ? Una Neva hear something. Fuel was increased by over 100%, nobody came out to demonstrate. It’s only to rant in the social media.”
Also towing the line of Akatikpo’s thoughts is Mrs. Onyekokote, her argument lies in the inability of government to utilize the money accrued from tax collection positively. Her summation: “Yet these land owners have no access to good road, portable water and light in their areas even after being heavily taxed. Nigerians have no issue paying tax, the problem is they don’t get return for their money. The politicians are the babies that Nigerian populace are nursing.”
Following these outbreak of anger, it’s now left to be seen whether the Lagos State government will reconsider the law and amend it or will turn a deaf hear to the people. Benconews promise to give you an update soon.

Highlights of LUCL 2018 

A Land Use Charge, which is payable annually, is described by the LUCL to be a consolidation of all Property and Land Based Rates and Charges imposed on all non-exempted real properties located in Lagos State. 
 
Owners and Occupiers holding a lease to a Property for ten (10) years or more are now liable to pay the annual LUC invoice charged on any such Property.
 
The value of a Property (“the Land Value”) plus the Building Development Value of the Property, both of which constitutes the property’s Market Value, are now to be multiplied by the applicable relief and charge rate to arrive at the annual LUC rate for each Property.
 
The Market Value of each Property is now required to be reviewed by the Lagos State Commissioner for Finance, at least once every five (5) years, based on the information provided by Professional Property Valuers.
 
Some of the Property Owners or Occupiers now exempted from paying an annual LUC on the Property that they occupy or reside in, in Lagos State, include the following:- (a) Properties owned or occupied by a religious body with such Property used exclusively for religious worship or education; (b) Libraries and Properties used by a registered educational institution certified by the Lagos State Commissioner for Finance to be a non-profit making educational institution; (c) Public cemeteries and burial grounds; (d) The palaces of recognised Obas and Chief in Lagos State.


Agency
 

A LUC Collecting Authority has the right to appoint an Occupier of a taxable Property to be the Agent of the Owner of the Property, for the purpose of paying the LUC out of the monies due to the Owner of the Property, which monies are in the custody of the Occupier. Such person or Occupier so appointed is entitled to claim an indemnity for all LUC payments made on behalf of the Owner of the Property.  
 
Default in paying LUC.
Failure to pay a LUC within the period specified in the LUC Demand Notice attracts the following penalties: – (a) 25% penalty on the LUC Demand Notice Rate not paid between 45 to 75 calendar days; (b) 50% penalty on the LUC Demand Notice Rate not paid between 75 to 105 calendar days; and (c) 100% penalty on the LUC Demand Notice Rate not paid between 105 to 135 calendar days.
 
Where the LUC Demand Notice is not settled after 135 days of the Tax Payer’s receipt of the Demand Notice, the Lagos State Government is authorised by the LUCL to appoint a Temporary Receiver/Manager to administer the Property until all the outstanding taxes, penalties and administrative charges are paid.


Land Assessment Appeal Tribunal
 

A LUC Assessment Appeal Tribunal (“LUCAAT”) is created under this new LUCL to consider and determine any appeal against a LUC Demand Notice Assessment. Such appeal must however be lodged within thirty (30) days after the date of the delivery of the LUC Demand Notice. 
 
The LUCAAT is allowed to adopt any ADR mechanism it so chooses in resolving any dispute brought before it. Appellants are also required to submit to a confidential Mediation process as part of the effort to resolve any LUC dispute expeditiously.


Offences and Penalities
 

Failure to notify the Lagos State Commissioner for Finance, in writing, of any change of use to a Property previously exempted from the LUC legal provisions, is an offence which on conviction carries a fine of three (3) times the value of the LUC Rate previously exempted. 
 
Also, any failure to comply with any of the provisions of the LUCL, obstruct LUCL officials and/or damage LUC Property Identification Plaques constitutes an offence which on summary conviction carries a maximum fine of Two Hundred and Fifty Thousand Naira (N250,000) or a term of imprisonment for a period of up to three (3) months, or to both the fine and the term of imprisonment.


Observations
 

Basing the Annual Land Use Charge Rate on the Market Value of a Property is an inequitable form of Taxation as the Owner of the Property is not as a matter of fact, receiving the market value of the property on an annual basis. 
 
Using the Market Value of a Property to assess its LUC on an annual basis has also been contended to amount to a subtle form of double taxation as Capital Gains Tax is paid every time the Property is sold or bought.
 
An open market value methodology will further only discourage real estate investments as the LUC will increase the costs of real estate developments in a depressed market already suffering high net-worth to middle class over-supply of housing units.
 
Following from the above concerns, is the natural principle of demand and supply which will compel the Owners of properties to pass at least some of the LUC increment to their tenants, thereby further increasing property rentals and inflation rates in an economy that has not properly gotten out of recession.
 
The non-exemption of unoccupied properties, which currently litter the Real Estate or Property market, from the application of the LUC, will also distress the property market and encourage tax evasion.
 
The provision of only some LUC relief, based on a prior application to the Lagos State Commissioner for Finance, as opposed to an express exemption for elderly retires living in their own homes is also a matter of concern especially as there is no functional and reliable pension or social welfare system to take care of elderly home owners or home occupiers.

 Additional report on the highlight from proshareng.com

 

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