Land Use Charge in Lagos: 12 Things You Should Know About the Law

Lagos Land Use Charge

The Land Use Charge Law was passed into Law by the Lagos State Government with a commencement date of June 22, 2001. The law is applicable to real/landed properties within Lagos State. 

The Law exists to generate the additional revenue needed to develop the Lagos state whose population is growing at an alarming rate without any corresponding increase and or improvement in its physical and social infrastructure.

On March 5, 2018, the reviewed law was passed by the Lagos State House of Assembly. The law became a merger of all the Property and Land-Based Rates and Charges in the state

According to Ambode Akinwunmi who was the Governor of Lagos State at the time said that the revised Land Use Charge Law requires owner-occupiers to pay just 0.076 per cent, pensioners, churches, mosques, non-governmental organisations and government institutions are exempted from payment.

Here a few things you should know about the law:

  1. Land Use Charge (“LUC”) is a Lagos State Property Tax backed by the Land Use Charge Law of 2018.
  2. LUC is a consolidation of Ground Rent, Tenement Rate, and Neighbourhood Improvement Levy.
  3. LUC is not a new form of tax. The Law backing LUC was first enacted in 2001.
  4. LUC is payable in respect of all real estate property situated in Lagos State 
  5. The revenue generated from Land Use Charge forms an integral part of the fund utilized by the Lagos State Government to provide the necessary Social Amenities and Infrastructures for it’s populace.
  6. The Lagos State Ministry of Finance is the Government agency responsible for the administration of the land use charge as it is under their purview.
  7. The following persons are liable to pay LUC:
  • Owner of property
  • The lessee of property- who then looks up to the property owner for reimbursement from any money due to him/ her.

8. LUC is an annual tax which is payable from the first day of every new year.

9. Here is how LUC derived:

Lagos Land Use Charge

Lagos Land Use Charge[/caption]LUC payable on a property is deduced by multiplying the Market Value (“MV”) of that property by the applicable Relief Rate (“RR”)and Charge Rate (“CR”), using this prescribed formula.

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] 


  • LA= area of the land parcel in square metres
  • LR= average Market Value of a land parcel in the neighbourhood, on a per square metre basis in Naira based on Market Value property as determined by professional valuers, appointed the Commissioner for Finance for that purpose
  • BA= the total developed floor area of building on the plot of land per square metres.
  • BR= average construction value of medium quality buildings and improvements in the neighbourhood, on a per square metre basis in Naira based on the market value of the property as determined by professional valuers, appointed 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 neighbourhood and 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 properties;

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.

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

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

12. The following category of properties are exempted from LUC:

  • Property owned and occupied by a religious body and used exclusively as a place of worship or religious education;
  • Public cemeteries and burial grounds;
  • Property used as a registered educational institution certified by the commissioner to be non-profit making;
  • Property used as a public library or as a private library certified by the commissioner to be non-profit making;
  • Any property specifically exempted by the Executive Governor by notice published in the State Official Gazette; and
  • All palaces of recognised Obas and Chiefs in the State provided that if any of the exempted property is leased out to private entities for revenue generation, it shall forfeit its exemption status as contemplated under the provisions of this Law.



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