18 Jan



This Section shall briefly discuss:

  • The nature of property tax.
  • The Land Use Charge Law of Lagos State.
  • Pre-existing Laws (which include):
  • Land Rates law.
  • Neighbourhood improvement Charge Law.
  • Tenement Charge Law.
  • Occupier, offences and receivership.
  • Appeal procedure.

The Nature of Property Tax:

:: The economists see property as anything that can generate income. For our purposes, it is real property like land. This type of taxation is underutilised in Nigeria with the exception of Lagos State.

:: Property tax is not expressly listed in the Exclusive or Concurrent list and is therefore regarded as a residual matter. Section 7 and item J of the 4th schedule to the 1999 constitution confers the Local government with the power to impose tax on property.

The pre-existing laws include:

The Land Rates Law:

Introduced in 1984. This law imposes land rates (development charge, ground rents, premiums, and other incidental rates) on allotees of State lands. Ranging from N3,460 to N10,000 per square mile depending on the location.

Neighbourhood Improvement Charge Law

Of 1986. Levies improvement charges on owners of privately owned property within an “improvement area”. Administered by the division of the ministry of land and housing.

:: An improvement area is an area which the governor designates as an improvement area where he is satisfied that:

  • Infrastructure has been provided by the State government at public expense.
  • Quality of life in the neighbourhood has been improved by government effort.
  • An area has been neglected and justifies government intervention.

Tenement Rate Law

Tenements include building on land or any wharf and any other property permanently attached to such land. Does not include vacant land-section 51 of the Tenement Rate Law, Shell V Burutu.

:: Tenement rate is levied primarily on the occupier (person staying on the property) or secondarily on the owner except he is also the occupier- Section 36.

:: The State valuation office carries out assessment of tenements.

:: Valuation can be challenged within 30 days (by going to the Assessment Appeal Tribunal) provided the taxpayer has deposited up to 50 percent of the money charged pending determination.

:: Payment of the rate  must be made within 30 days. Penalty of 25 percent (where within 45 days, 135 days?= fine of 100,000 or imprisonment for 6 months) property can also be distrained.

:: Rate collectors appointed by the LG collect tenement.



:: This law has been validated by the court in Shell PDCN V Governor of Lagos State.

:: it is an annual tax payable on the value of real property in Lagos.

:: Public, religious and non-profit properties are exempted from the operation of this law.

:: The Land Use Charge Law was enacted to harmonise and consolidate all pre-existing taxes and rates payable under the existing laws-(see its preamble). The problem is that it fails to expressly repeal the pre-existing laws. Although Section 22 extinguishes liability to other tax where LUCharge has been levied.

:: It is the owner of the real property that pays LUC. Check other laws which provide for “occupier”, “allottees of state land” and so on.

::  Failure to pay attracts increased liability in percentage. After 135 calendar days, the affected property may be liable to receivership. A maximum fine of 100,000 or term of imprisonment may be imposed.


  1. Failure to Repeal Pre-existing laws: it seems like the only saving provision is Section 22 which provides that a property shall be immune from other like rates where LUC has been levied. Nevertheless, this may lead to multiplicity of taxes.
  2. Imperfect timing: for the commencement date. (22 June, 2001). A desirable commencement should be at beginning or end of the year to suit those that have/haven’t already paid taxes under the pre-existing laws.
  3. Delegation: Taxing of tenement is within the power of the State which is mandated to delegate the power to the LG to collect as such can Section 1(3) LUC which enable local government to delegate same to State appears to be confusing. It would have been better couched as the State withdrawing the power. Thereby terminating agency.
  4. The punishment of receivership: the property of a non-compliant person or company may go under receivership. People have argued that the Companies and Allied Matters Act provides that only the FG can take over the affairs of a company under receivership. So how come the LUCLaw allows the State place the property of a non-compliant company under receivership? This argument has been dispelled on the ground that the State takes over land rather than operations of the company. It is the FG that takes over the activities in accordance with the Companies and Allied Matters Act. Therefore, there is no conflict between the LUCL and the Companies and Allied Matters Act.

:: An appeal may be made where a person contests chargeability of the asset or arbitrariness of charge. In Bamidele V Commissioner of Local Government, the court held that it was wrong for the State to run the affiars of a market which was the duty of the local government.



Quite eccentric really

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