The Lagos State Government may review the land use charge downward on a case by case basis, the Commissioner for Information and Strategy, Kehinde Bamigbetan told Journalists recently. He gave a breakdown of the amount to be paid by owners of different house-types. Bennett Oghifo reports
Homeowners in Lagos may receive a pleasant surprise from the Lagos State Government with a downward review of the land use charge (LUC), which has elicited condemnation from some professional bodies and community groups across the state.
The Lagos State Commissioner for Information and Strategy, Kehinde Bamigbetan told Journalists at a briefing at the weekend that a lot could still be done before the government gazettes the LUC, urging property owners in the state to be calm.
Bamigbetan said various channels were open to property owners who believe they have been overbilled to seek redress and that each case would be settled in the interest of all parties.
The commissioner presented a ‘Scenario Analysis of Land Use Charge’, which gave the LUC formula as: (Land Value + Building Development Value) x Relief Rate x Charge Rate.
For instance, a property owner, whose home has a value of N15 million has 40 per cent general relief, and the assessable property value comes to N9 million.
Now, the charged rate for Owner-occupied is 0.067%; Commercial is 0.760%; Owner Occupied + Commercial is 0.236%.
Thus, owner occupied building with assessable property value of N9 million, will pay an annual LUC of N6,840 or N570 monthly; for Commercial owner in this category the annual LUC is N68,400 or N5,700 monthly; and Owner occupied + Commercial annual charge is N23,040 or N1,920 monthly.
Bamigbetan did the same analysis for homes/buildings with real value based on what the government described as ‘The Blue Book’, which split Lagos into 3,000 Valuation Districts.
However, each home/building is given an initial reprieve of 40 per cent after which the ‘Assessable Property Value’ is arrived at.
The single largest amount to be paid, according to the Scenario analysis, is by owners of ‘commercial only’ property of N200 million as the real value and N120 million as its Assessable Property Value.
The owner of such property is expected to pay an annual LUC of N912,000 or N76,000 monthly.
He said there are other discounts offered certain categories of home/building owners, particularly retirees, senior citizens, physically challenged, widows, homes that were built 25 years ago, and over, among others.
The government is seeking other ways of funding infrastructure and services other than using money from the bond market, which would put avoidable debt burden on future generations of Lagosians, he said.
The LUC structure is designed to protect the weak without necessarily putting stress on the strong, according to the commissioner.
He said those shouting down the LUC should have taken advantage of the opportunity presented at the Public Hearing at the Lagos State House of Assembly, but that they still have room to articulate and present their views before the LUC goes into gazette.
Homeowners in Ikoyi and Victoria Island are particularly miffed by the LUC, saying they suspect they are unduly taxed even when, in 19 years of civilian rule, their neighbourhood roads have been in terrible condition, no electricity and that they are deprived of public water.
An aggrieved homeowner (who wants his identity protected) said, “The government collects 80 per cent of its taxes from us, but they leave us with bad roads but reconstruct roads on the mainland, and they forget that the foreign agencies that conduct the livability index of cities and countries stay in Ikoyi and Victoria Island when they come to do their assessments. You can imagine why they score Lagos low on the index.”
The LUC did not go down well with residents of Lekki, whose association’s executive has instructed homeowners not to pay until further notice.
According to their Chairman, Lekki Residents Association, Prof. Ajose, the LUC is “most unreasonable. Residents should not pay yet.”
Also meeting this week to take its decision on the LUC is the Victoria Island and Ikoyi Environment and Security Trust (VIISET), formerly known as VIRA.
Regardless, a resident of Lekki and an Estate Surveyor and Valuer, Chief M.I. Okoro, Principal Partner of M. I Okoro and Associates, said “I support the review of the Land Use Charge. Why the noise making? The only area I quarrel about is that the government was not diplomatic in its introduction; they should have done enough sensitisation. The government took the people for granted.”
However, Okoro said the government’s review of the LUC was in order because they had done a lot in infrastructural development that had triggered an appreciation of capital and rental value in the state.
“Land that was sold at N1.5 million 15 years ago now sells for between N150 million and N200 million”, adding that rental value has also increased and that the rise was as a result of “massive infrastructure development in the state; Look at Lekki Phase 1 axis, particularly the Lekki-Ikoyi link bridge. Landlords are smiling to the bank because of the appreciation of capital and rental value.”