Frequently Asked Questions - FAQ

FAQs - FAQ

•LUC payable on a property shall be arrived at by multiplying the Market Value (“MV”)of that property by the applicable Relief Rate (“RR”)and Annual Charge Rate (“CR”), using the prescribed formula.

The formula that shall be used to determine the annual amount of LUC payable is:

LUC = (Land Value + Building Development Value) x Relief Rate x Charge Rate

•The formula can be interpreted as:

LUC = [(LA x LR) + (BA x BR x DR) x RR x CR]

•Where

LA= area of the land parcel in square metres

LR= average Market Value of a land parcel in the neighbourhood, on a per square metrebasis in Naira based on Market Value property as determined by professional valuersappointed the Commissioner for Finance for that purpose

BA= the total developed floor area of building on the plot of land om square metres, or total floor area of apartment unit in a building where the apartment has a separate ownership title

BR=average construction value of medium quality buildings and improvements in the neighbourhood, on a per square metrebasis in Naira based on the market value of the property as determined by professional valuersappointed the Commissioner for Finance for that purpose

DR= the Depreciation Rate for the buildings and improvements of land which accounts for the building being of higher or lower value than the average buildings in the neighbourhoodand which also accounts for the degree of completion of construction of the building

RR= rate of relief from tax (if any) applicable to the owner-occupier in the circumstances shall be determined by the Commissioner and published in the State Government Official Gazette and in one or more newspapers circulating within the State and reviewed by the Commissioner once every five years

‒CR= annual charge rate expressed as a percentage of the assessed Market Value of the property and which may, at the State Government’s discretion, vary between:

a)owner occupied and other property;

b)residential property and commercial (revenue-generating property);

c)physically-challenged persons; and

d)persons who have been resident at the same location for at least 12 years, minor, retired owners and occupiers, on the one hand, and other owners and occupiers on the other.

•The Annual Charge Rateto be applied to eligible property in Lagos State shall be as follows:

1.Owner-occupied residential property–0.076% per annum of the assessed property value

2.Owner-occupied pensioner’s property–Exempted from LUC

3.Lagos State Government property–Exempted from LUC

4.Industrial premises of manufacturing concerns–0.256% per annum of the assessed property value

5.Residential property (owner and third party–0.256% per annum of the assessed property value

6.Residential property (without owner in residence)–0.76% per annum of the assessed property value

7.Commercial property (used by occupier for business purposes)–0.76% per annum of the assessed property value

8.Vacant property and open empty land–0.76% per annum of the assessed property value

•There are various forms of reliefs that are available to payers of LUC.

•The reliefs include:

a)General reliefof 40% (applicable to all property liable to pay LUC); and

b)Specific reliefsapplicable to property owners and leases of 10 years and above for:

I.Pensioners (60 years and above)–100% for owner-occupied property

II.Persons with disability–10% for owner-occupied property

III.Aged persons(70 years and above) –10% for owner-occupied property

IV.Age of property–10% for property aged 25 years and above

V.Long occupation by owners–5% for 12 years and above

VI.Federal and other State Government property–20% for non-revenue generating property

VII.Partial relief under the LUC Law–20% for non-profit-making organisations

•To enjoy the available reliefs, payers will need to provide relevant documentary evidence to support their relief claims.

•All application for reliefs can be made to the Commissioner for Finance for approval and supported with relevant documents.

•All LUC paired within 15 days of receipt of Demand Notice will enjoy a timely payment discount of 15%.

•The minimum LUC payable on any given property shall not be less than ₦5,000 irrespective of any LUC relief granted on the property.

•The Commissioner for Finance is empowered to appoint such Property Identification Officers, Professional Valuersand other persons as may be considered necessary for the purpose of assessing the charge applicable to a property.