If you own a house, flat or plot in Lagos, the state sends you a bill every year called the Land Use Charge (LUC). It is Lagos’s property tax. Many diaspora owners only learn about it when a buyer’s lawyer asks for receipts, or when arrears and penalties have built up for years.
This guide covers who pays, the rates in the law, the 15% early-payment discount on the 2026 bills, the late-payment penalties, and what to check before you buy.
Short version: the owner pays, not the tenant. The 2026 bills went out in early March 2026 with a 15% discount for paying early (Lagos Ministry of Finance, via NAN, 4 March 2026). The amount is a percentage of the assessed value on your bill, and the percentage depends on how the property is used.
Who pays the Land Use Charge?
The property owner. When the Lagos Ministry of Finance released the 2026 bills, it addressed them to property owners and warned that “enforcement actions against 2025 defaulters will commence shortly” (TheNigeriaLawyer, 5 March 2026). Nigeria Housing Market’s report of the same statement says owners and landlords, not tenants, “remain legally responsible for settling the annual assessment” (NHM, 5 March 2026).
If you live abroad and rent the property out, the bill is often delivered to the address and lands with your tenant or caretaker. Ask them to send you a photo of every bill as soon as it arrives. A bill that sits in a drawer still counts against you.
How much is it? The rates in the law
The charge is a percentage of the assessed value of the property, not the price you paid. The rates below come from the Land Use Charge Law 2020, which cut the 2018 rates by about 48%. Three separate summaries published in August 2020 give the same figures (Nairametrics, 6 Aug 2020; AO2LAW, 10 Aug 2020; Bomes Resources snapshot, Aug 2020).
| How the property is used | Annual rate (2020 law) |
|---|---|
| Owner lives in it (residential) | 0.0394% |
| Residential, owner and tenants both living there, or private school | 0.132% |
| Industrial premises of a manufacturer | 0.132% |
| Residential, owner not living there (fully let) | 0.394% |
| Commercial, used by the occupier for business | 0.394% |
| Vacant property and open empty land | 0.0394% |
| Agricultural land | 0.01% |
The point to take away: a property you let out is charged at ten times the rate of the same property if you live in it yourself. Most diaspora owners fall into the “owner not living there” line.
An illustration, not a quote: if your bill shows an assessed value of ₦50 million and the property is fully let, 0.394% comes to ₦197,000 for the year. The 15% early-payment discount would take ₦29,550 off that. Your real bill depends on the assessed value and the reliefs the state applies, so read the figure on the bill itself.
Check the current figures on your bill. Some law firms report a Land Use Charge (Amendment) Law 2025 that took effect on 1 January 2026, including a higher penalty on undeveloped land (Manasseh Ehile & Co., July 2026). We have not seen the gazetted text, so we have not changed the table above. If your 2026 bill uses a different rate, the bill is what you owe.
The 15% discount on the 2026 bills
Lagos released the 2026 bills in early March 2026 and offered a 15% discount to owners who pay early. Tajudeen Mahmud, Permanent Secretary at the Ministry of Finance, stressed voluntary compliance (NAN via Peoples Gazette, 4 March 2026). The statement tells owners to pay “within the stipulated period” but the reports do not say how long that period is. The deadline is printed on each bill, so check yours.
If you missed the discount this year, watch for next year’s bills and pay as soon as yours arrives.
What happens if you pay late
Under the 2020 law, penalties grow the longer the bill stays unpaid (same three sources as the rate table):
| Days the bill is outstanding | Penalty |
|---|---|
| 45 to 75 days | 10% |
| 75 to 105 days | 20% |
| 105 to 135 days | 50% |
The 2020 law also cut the number of default notices before enforcement from three to two. When you sell, a careful buyer’s lawyer will ask for your LUC receipts, and arrears can hold up the sale or come off your price.
Are any owners exempt?
Yes. Property owned and occupied by a pensioner is exempt. The 2020 law widened “pensioner” to include retirees from private as well as public institutions, and anyone aged 60 or over who no longer works for pay (Nairametrics, 6 Aug 2020). The exemption is for the home the pensioner lives in. A property they let out is still charged.
If you think you qualify, ask at an LUC office how to have the exemption recorded against your property, and keep proof of your pension or age with your documents.
How to pay
The Ministry of Finance listed these channels for the 2026 bills (TheNigeriaLawyer, 5 March 2026):
- internet banking
- designated bank branches in Lagos
- USSD on your phone
- POS terminals at LUC offices
- the Lagos Online Assistant on WhatsApp
- the Lagos Revenue Portal
The official LUC site is luc.lagosstate.gov.ng. Pay only to the account or portal named on the bill, never to an “agent” who offers to settle it for less. Keep every receipt, scanned, in the same folder as your title documents.
Before you buy: ask for the LUC receipts
Unpaid bills on a property you have just bought can turn into an argument with the seller, so check them before money changes hands:
- Ask the seller for the last few years of LUC bills and receipts.
- Check that the name and address on the bills match the property you are buying.
- Ask your lawyer to make clearing arrears a condition before completion.
- After you buy, update the owner’s name with the LUC office so future bills come to you.
The receipts also help in a quieter way. A run of bills in the seller’s name is one more sign that they have been treated as the owner for years. It does not replace a search at the Lands Registry, though. Our buyer’s checklist covers the full set of documents, and our guide to checking a building is approved covers the planning side.
Selling? Clear it first
If you plan to sell, pay off any arrears before you list the property. It is one less thing for the buyer to negotiate on. Our guides on how to sell land in Nigeria and capital gains tax on a sale cover the rest of the costs on the way out.
FAQ
Is the Land Use Charge the same as ground rent?
No. The Land Use Charge, first passed in 2001, combined three older levies into one: tenement rate, ground rent and neighbourhood improvement levy (ThisDay, 30 March 2018). That is why Lagos owners get one LUC bill. Abuja works differently: FCT plot holders pay ground rent to the FCTA.
My tenant got the bill. Do they have to pay it?
No. The owner is responsible. Your tenancy agreement can say who handles the paperwork, but the state looks to the owner. See our guide to the Lagos tenancy rules.
I never received a bill. Am I off the hook?
Not safely. A bill may have been raised for your property even if the paper never reached you. Check on the official LUC site or at an LUC office.
Can I pay from abroad?
The online channels (internet banking, the Lagos Revenue Portal, the WhatsApp assistant) do not need you to be in Lagos. If none works for you, someone you trust can pay at a designated bank branch. Make sure the receipt comes back to you.
Not sure what you owe or whether a seller’s bills are clean? Message us on WhatsApp at +234 901 165 5263 and we will tell you what to ask for. You can also use our property tools to work out the other costs of buying.
