Lagos State Governor, Babatunde Fashola has Monday signed into law an executive bill reducing the cost of land transactions in the state saying it is in order to ensure that land transactions are carried out with minimal difficulty especially with difficulties relating to payment of taxes, rates and legitimate levies charged under the enabling law.
The Executive Order with reference number EO/BRF/001 of 2015, provides, among others, that “unless otherwise indicated, the valuation of landed property for the determination of tax and other charges payable shall be by reference to the Statement of Fair market Value produced by relevant professionals, adopted by the State Government and published from time to time in the Official Government Gazette.”
The order, which takes immediate effect, reduces Consent Fees from six percent to 1.5 percent while Capital Gains tax, which was previously two percent, is reduced to 0.5 percent. Also cost of Stamp Duty has been reduced from two percent to 0.5 percent while Registration Fees has been reduced from three percent to 0.5 percent.
In his remarks before signing the order, Fashola said the order is intended to improve the internal management of the State Government and not to create any rights or benefits, substantive or perpetual, enforceable at law or in equity by a party against Lagos State, its departments, agencies or entities, its officials, employees or experts or any other person.
He added that at the time when the State’s economy was challenged, there was need to continue to grow the information on capital, business concerns and industrialisation adding that some of the expectations in expanding business in the State’s enterprise zones and the Free Trade Zones could only be achieved through the reduction of cost of land acquisition.
“We expect also that if we as government play a role, by reducing a cost of setting up business, we have made a huge impact enabling private enterprise to thrive and in that way hopefully provide employment opportunities to businesses that will be form as the results of this policy intervention,” Fashola said.
The Governor, who said the signing of the Executive Order was consistent to the promise he made to Lagosians when he presented the 2015 budget that he would do so “based on the decisions of Council,” added that the order, which, according to him, takes immediate effect, “sends the strongest possible signals to any of the investors about where to put money.
“So, consistently in Lagos the cost of land transactions have come down from 30 percent or thereabout in Pre- 1999, down to 13 percent around 2005, and finally now to cumulative total of three percent and I hope that the investing public will respond to this favourably especially local investors because for me local investors are the most important investors,” Fashola added.
Urging the Land Bureau to work closely with the Office of the Secretary to the State Government to gazette the Executive Order, Governor Fashola said such would also hasten the gazette of rates compiled by the professionals and Estate Valuers, who in the meetings with government said such rates were agreeable.
“It is also important to bring certainty into this transactions by making the public aware of what their expectations and obligations are,” the Governor said adding that the order would also reduce ambiguity and discretion in the hands of assessing officials “so that people at the beginning of the transactions know what the end to end cost of that transaction is even before they start to make a commitment, so in this way we hope that we would have contributed to the need to help in diversifying the economy and providing the opportunities.”
Earlier while introducing the Executive Order, Attorney General and Commissioner for Justice, Mr. Ade Ipaye, said since 2005, government has fixed certain valuations which it has been using as standard across the State adding that for 10 years, government has kept those valuation standards constant.
“Now, the State Executive Council at the instant has approved the new policy where the current fair market value will be used as basis for not just valuation but also the taxes and charges that we apply,” he said.