The Land Use Charge is a form of indirect tax payable only by property owners or occupiers of such a property. It is a consolidation of all land-based rates and charges payable in Edo State. It has three components: the Property Tax, Ground Rent and Tenement Rate. Both property tax and ground rent are for the state while the tenement rate goes to the local governments.
The Land Use Charge is not a new concept. It is backed by law and derives its legality from the Land Use Charge of 7th December 2012, amended in 2013, repealed and re-enacted in June 2023 and it is now being cited as the Edo State Land Use Charge Law of 2023. The implementation of the Land Use Charge began in Edo State in 2014 with the issuance of the first Land Use Charge demand notices.
The Land Use Charge is an annual payment which may be reviewed at least once every five years, according to the law establishing it. The rates payable as Land Use Charge differ according to the size, purpose (use) and location of the property. The law provides for different rates under its schedule of rates for different categories of uses (purpose) to which the properties are put.
The rates include: Commercial Properties (0.375%), Commercial Residential (0.15%), Owner Occupied Residence (0.040%), Industrial Premises (0.20%), Institutional Premise (0.10%), and Agriculture Concerns (0.075%) and vacant building, developing and undeveloped land (0.025%).
It is instructive to note that the Land Use Charge payment is not done in cash. The demand notice contains the name and account number of the designated Land Use Charge banks into which the taxpayer can lodge it. This is to ensure transparency and accountability and to block leakages.
It is also interesting to note that the Land Use Charge can be paid in instalments. As a matter of fact, it can be paid in three instalments, but payment must be completed within the timeframe indicated on the Land Use Charge.
When payments are made within 15 days of the receipt or delivery of the notice, the taxpayer is entitled to a 10% discount of the amount payable. However, the incentives do not apply to those who pay in instalments, except those who pay theirs at once within the aforesaid record time of 15 days.
In the event that there are arrears, such arrears are carried forward to the following year with their penalty’s complements.
The penalties for non-compliance with the provisions of the Land Use Charge Law are clearly spelt out in section 27 of the LUC Law. It provides that anyone who prevents, hinders, molests or obstructs any property identification officer or an appointed registered Estate Surveyor or Valuer in the course of lawful duty, or removes, damages or destroys a Property Identification Plan on any property or building, commits an offence and shall be liable on summary conviction to a maximum fine of N150,000 (one hundred and fifty thousand naira only) or a maximum term of imprisonment for a period of three (3) months or both.
Also, in the cases of default in payment of Land Use Charge, section 29 provides that where a person who has received Land Use Charge demand notice fails to pay the amount charged within the period specified in the notice, the charge payable shall be increased in the following order: The defaulter is expected to pay the principal sum of liability plus the following: (a) Between 45 and 75 calendar days – 10% of amount charged; (b) Between 75 and 105 calendar days – 20% of the amount charged.
If payment is not made after 135 calender days, the property on which the LUC is payable shall be liable to enforcement under the provisions of the law, by both EDOGIS/local government councils.
In extreme cases, section 26 of the law provides that the Attorney-General of the State shall on the recommendations of the Edo State Geographic Information Service (EDOGIS) and/or local government council or their appointed organization or agency apply to court to:
(a) Recover sums payable under the law.
(b) Recover any Land Use Charge or penalty incurred under the law by a deceased person at any time before the person’s death.
(c) Attach a person’s earnings and/or a person’s goods where a court has made a liability order against that person. In such a case, an officer from the Attorney-General’s office acting on the AG’s behalf may sue in the name of the Edo State Geographic Information Service (EDOGIS) and/or the local government council to recover any sum payable under this law from the owner.
It must be observed that the Land Use Charge is not negotiable. However, if anyone has any objection as regards the assessment, he/she is entitled to object within 30 days on payment of 25% of the assessed value.
For any property that does not yield any income, the law is also clear. The property owner is expected to pay, as the Land Use Charge is a levy on property and not on income. This is why a vacant land also pays a Land Use Charge.
However, there are some categories of properties which are exempted from the payment of the Land Use Charge. Section 12 of the LUC Law 2023 provides that the following categories of properties shall be exempted from payment. They include:
(i) Property owned and occupied by a religious body and used exclusively as a place of worship.
(ii) Public cemeteries and burial grounds.
(iii) Property used as public library.
(iv) Any property specifically exempted by the Governor by a notice published in the official gazette; and all palaces of recognized traditional rulers in the state, provided that if any of the exempted properties is leased out to private entities for revenue generation, it shall forfeit its exemption status as contemplated under the provision of the law.
As a matter of utmost importance, all concerned Edo citizens/residents are encouraged to pay the Land Use Charge and refrain from inciting others not to pay. Penalties await anyone who incites another person to refuse to pay any rate under the law. Such person is liable to a maximum fine of N150,000 or to a maximum term of three months imprisonment, or both.
The imperative of paying the Land Use Charge lies in the overriding need to sustain the tempo of massive infrastructural renewal currently being undertaken by the Governor Obaseki-led administration in the state.
With more funds from the Land Use Charge, there is no doubt that Governor Obaseki will do more for Edo people, given his track record of monumental achievements in the past six and a half years. It is therefore germane that all Edo residents, and particularly property owners, buy into the project to enable government build more schools, construct more roads, pursue all its institutional reforms and deepen the level of growth and development in the state in all ramifications.
*Eigbiremolen is the Director of Media, EDOGIS.