Frequently Asked Questions - FAQ


•Land Use Charge (“LUC”) is a Lagos State property tax backed by the Land Use Charge Law of 2018.

•LUC is a consolidation of ground rent, tenement rate, and neighbourhoodimprovement levy.

•LUC is not a new form of tax.

•The Law backing LUC was first enacted in 2001.

LUC shall be payable in respect of all real estate property situated in Lagos State (“the State”).

•The LUC Law was repealed and re-enacted to address some identified challenges which include:

1.Lack of clarity on the LUC formula to support self-assessment;

2.Obsolete rates which had not been reviewed in over a decade;

3.Need to improve LUC administration efficiency; etc.

•The new LUC Law also provides a robust legal and regulatory framework to support ongoing LUC administration reforms aimed growing the State’s economy.

•Revenue generated from LUC is shared between the State Government and all the 57 Local Government/Local Council Development Areas.

•Administration of LUC is under the purview of the Lagos State Ministry of Finance (“MoF”).

•Responsibility for payment of LUC is on:

1.Owner of property for owner-occupied property

2.Lessee of property –in case of long term lease of not less than 10 years

•Self-assessment essentially means that payers can compute the amount of LUC payable on their respective property by themselves.

•What this means is that, since the formula is now easy to understand, you do not need to wait to receive a demand notice on your property before making payment; from the comfort of your home, you can calculate the LUC payable and are able to make your payments promptly.

•We expect that this will drive up compliance, improve the timeliness of collections and minimiseleakages.

•Before now, the formula/basis for LUC determination were not clearly defined thereby creating room for subjectivity in the computation of LUC amount payable.

•Furthermore, payers were only able to make payments of LUC based on demand notices served by the State Government.

•However, due to administrative challenges, including inadequate enumeration, LUC demand notices were not served timely/regularly in most cases.

•This meant that, if you did not receive a demand notice, you were not likely to pay LUC thereby resulting in lost revenue to the State Government.

•LUC is an annual tax which becomes payable from the first day of each new year (i.e. from 1 January).