Land Use Charge Lagos Nigeria - Free Land Tax Tips.

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Land use charge Lagos Nigeria - All land in Lagos Nigeria and everywhere else in Nigeria belongs to the government. The federal government has some landed property in each state but overall all of the land in each state belongs to the state government.

Since all land belong to the government, the occupants . . . the landlords . . . pay a token land tax called the land use charge to the government of the state where the land is located.

Does this sound confusing?

First, I said the government owns all the land. And then again I said the landlords pay a land tax to the government called land use charge.

If the government owns all the land, then isn't the government the landlord?

If you think the government is the landlord, then you're right. The government is indeed the overall landlord because they own all the land.

However, you will notice that when people use the word "landlord" they usually refer to a home owner and not the government.

Why is that so?

Well, it's because the government issues a certificate of occupancy (C of O) to anyone interested in buying land from the state government. And that certificate of occupancy covers a period of 99 years.

In simple words . . . the government is willing to sell (actually, lease) its land to anyone if the person involved is willing to pay for it.

However, unlike regular property lease, the person issued the certificate of occupancy (or certificate of lease, if you like) can build on the property and use the property any how he wishes (as long as he does not violate any federal or state law) because the c of O confers term lease ownership on him for 99 years. And this lease ownership is renewable.

The home owner pays the government for the land lease when processing the c of o. And thereafter pays the annual land tax or land use charge as prescribed by the government.

Bottom line.

The land use charge is the amount paid by the home owner for use of the government land officially leased to him by the Lagos state government or the government of the state in Nigeria where the land is located.

The Land Tax Amount

What is the value of the land tax?

The land use charge was calculated as 0.375 percent of the assessed property value for one property in Alimosho local government area of Lagos state, as at the time of this writing.

What is the assessed property value of a property?

This is the value the state government places on your property. More often than not, this is lower than the open market value of the property in question.

How is this value calculated?

You will need to ask the property assessors at the land registry for that detail. But since the assessed value is most likely lower than the market value of a property, it is safe to assume that a number of factors have been taken into consideration in reaching this assessment.

What happens is that the Lagos state government sends the land use charge notice to property owners in Lagos Nigeria every year. And the notice specifically mentions that this land tax should be paid within 30 days of the date of the notice.

The demand notice also stipulates the penalty for not paying within 30 days, counting from the date on the land tax notice document. The penalty increases every month you fail to pay until mid year when the penalty is equal to the amount you were billed.

That is, after mid-year, the penalty is 100 percent of the notice amount . . . twice the land use charge you were originally billed.

So, it makes sense to pay the bill as soon as it arrives in your mail.

In fact, the Lagos state government offers about 15 percent discount if you pay promptly before the date stipulated on the land tax notice.


Land Use Charge Debate

Bill payment notices often generate debates. So, you can be sure that the land tax will also generate debate. And people on either side of a debate are often passionate about their opinions.

For example, some wonder why the land use charge is calculated as a percentage of the assessed value of the property and not as a percentage of the rental returns from the house.

The true value of a house is how much rental value it commands, right?

Why not charge the tax as a percentage of rental values in the area the property is located?

Another thing.

The penalty after 6 months of non-payment is 100 percent of the initial bill.

That is stiff!

Help please!

One more thing.

Will a landlord be required to pay tax on his rental earnings from his property after he has already paid land tax?

Food for thought.

Bottom line.

Pay your land tax or the land use charge promptly . . . as and when due.

The government has a lot of muscle and they will not fail to use "the long arm of the law" against defaulters.

So, if you've been defaulting . . . pay up!

Buyer Beware!

Many property owners do not pay the land use charge. And therefore the bill (plus the penalty) accumulates year on year.

Guess what.

If you buy a property where the property owner has not been paying the land tax for over 10 years, that tax can become a sizeable amount. And you inherit that tax amount when you buy the property

My advice?

Ask for evidence of the payment of this land charge before you finalize a property purchase.

You know what?

You can get a discount off the property value equal to the amount owning as land use charge if you do due diligence in this area.

If you fail to investigate this "small matter", you will be the one to pay when the government come with a vengeance.

Think twice!

P.S: Verify the value of the land use tax for the area your property is located. If you have not been receiving his tax notice from the Lagos state government, then visit the ministry of finance to request your bill. Ignorance is not an excuse in the face of the law.

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