The Lagos State Government has implemented significant amendments to the Land Use Charge (LUC) law, effective January 1, 2026, following the passage of the Land Use Charge (Amendment) Law 2025.
The changes aim to increase compliance, discourage land speculation, incentivize development, and reward sustainable building practices. They are already visibly affecting holding costs, development timelines, buyer negotiations, and investor calculations across Lagos in Q1 2026.
Key Changes in the 2026 LUC Amendments
- Higher Surcharges for Undeveloped Land
- Undeveloped plots (no substantial building or active use) now attract a 100% penalty surcharge on the base LUC rate.
- Previously: 50% surcharge.
- Purpose: discourage land banking and accelerate development in high-demand areas.
- Expanded Exemptions for Green-Certified Buildings
- Properties with NGBC Level 2+ certification (≥50% renewable energy, ≥40% water efficiency, etc.) qualify for 50–100% LUC exemption for the first 5 years post-certification.
- Level 1 certified buildings receive 25–50% relief.
- First-time exemptions granted in Q1 2026 to several Lekki & Ikoyi developments.
- Simplified & Mandatory Online Payment Portal
- New LIRS portal (lagosirs.gov.ng/luc) now requires BVN verification for all payments and exemptions.
- One-time registration links property, owner BVN and payment history.
- Paper payments largely phased out; non-digital submissions attract 10% surcharge.
- Updated Base Rates & Bands (2026)
| Property Type / Use | Base Rate (per ₦1,000 of assessed value) | Notes / Changes |
|---|---|---|
| Residential owner-occupied | 0.3% | Unchanged |
| Residential rented / commercial | 0.5–1.0% | Unchanged |
| Undeveloped land | Base + 100% penalty | Surcharge doubled |
| Green-certified (Level 2+) | 0% for first 5 years | New exemption |
| Industrial / agricultural | 0.2–0.4% | Slight upward revision |
Practical Impact on Investors & Developers in 2026
Investors (Buy-to-Hold / Buy-to-Let)
- Undeveloped land: Holding cost doubled — many selling off non-core plots.
- Developed properties: Green certification now saves ₦2M–₦45M annually in LUC depending on value.
- Rental calculations: Higher LUC passed to tenants → rents in non-green buildings up 5–10% in some areas.
- Exit strategy: Green-certified properties selling 10–18% faster and at premium prices.
Developers
- Timeline pressure: 100% undeveloped penalty pushes faster construction.
- Cost-benefit of green: Upfront solar/green premium (8–14%) recovered in 2–4 years via LUC exemption + rent premium.
- Cash flow: Online BVN portal speeds refunds/exemptions but requires early registration.
Online Payment & Verification Process (2026)
- Register on lagosirs.gov.ng/luc with BVN & phone number
- Link property (PID or assessment number)
- View updated assessment & new rate
- Pay via card, bank transfer or USSD
- Download digital receipt & exemption certificate (if applicable)
Risks & Action Steps
- Non-compliance: 10% surcharge on late payment + possible property sealing
- Assessment disputes: Appeal window 30 days; many succeed with surveyor report
- Action now: Verify your property’s new LUC status online before March 31, 2026 deadline for first payment.
Final Thoughts
The 2026 LUC amendments are not just administrative tweaks — they are actively reshaping ownership economics in Lagos.
Higher penalties for idle land punish speculators, while green exemptions reward sustainable development.
For investors and developers, the message is clear: hold productively, go green, and use the digital portal — or pay significantly more.
Have you checked your property’s new LUC assessment yet? What change surprised you most? Share below!
Disclaimer: This information is for general purposes only and not legal advice. Consult a qualified real estate lawyer for guidance.
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