In a surprising turn of events, the Lagos State government has decided to reverse its decision to increase building planning permit rates by a staggering 100 percent, which had caused considerable controversy earlier this year. The move to lower the rates comes after consultations with professionals in the built environment sector and is aimed at improving voluntary compliance.
Official government sources have confirmed that the rates have been reduced by 40 percent. However, town planners, acting under the Nigerian Institute of Town Planners (NITP), are urging the state government to consider further reductions to stimulate construction activities in the state.
The initial 100 percent increase had sparked concerns due to the challenging economic situation, exchange rate volatility, cost-push inflation, and rising building materials prices. This hike was anticipated to have adverse effects on the real estate sector’s contribution to the Gross Domestic Product (GDP) and reduce overall construction activities.
Lagos State is known for its vibrant construction industry, boasting over 10,000 active housing projects among the 36 states in the country. The fear was that landlords and property owners might exploit the situation by raising rents, which could potentially exacerbate homelessness issues in a state with a population of 22 million.
Prior to the increase, building assessment fees were set at N10,000 for areas ranging from one to 650 square meters, with subsequent 1,000 square meters incurring a fee of N4,000. Stage certification fees were 35 percent of the building assessment, with registration and application fees set at N5,000 and N25,000, respectively. Renovation fees were either 25 percent with a former permit or 100 percent without proof of a former permit.
The decision to revise these rates was conveyed through a memo from the Permanent Secretary, Oluwole Sotire, addressed to all heads of departments and units under the state’s Ministry of Physical Planning and Urban Development. The ministry secured the governor’s approval for the rate review, particularly concerning the fees issued by the Lagos State Physical Planning Permit Authority (LASPPPA), as outlined in Schedule 11 and 13 of the state’s physical planning permit regulation for 2019.
The proposed new rates are categorized into four zones across the state. In Zone one, which includes Eti-Osa, the rates are set at N320 for ground to fourth-floor buildings, N600 for five to 10-floor buildings, and N1,000 for buildings with 11 floors and above. Residential units are billed at N1,000,000, with a stage fee of 40 percent.
For Zone two, covering areas like Lagos Island, Kosofe, Somolu, Surulere, Oshodi-Isolo, Lagos mainland, Apapa, Amuwo-Odofin, Ibeju-Lekki, and Ikeja, the rates are N200 for ground to four-floor buildings, N500 for five to 10-floor buildings, and N800 for buildings with 11 floors and above.
Zone three, encompassing Mushin, Ojo, Ikorodu, Alimosho, Agege, and Ifako-Ijaiye, has rates set at N150 for ground to four-floor buildings, N400 for five to 10-floor buildings, and N600 for buildings with 11 floors and above.
In Zone four, which includes Epe, Badagry, and Ajegunle, the rates are N100 for ground to four-floor buildings, N300 for five to 10-floor buildings, and N500 for buildings with 11 floors.
The 40 percent reduction in staging fees applies uniformly across all zones. This decision is expected to ease the financial burden on developers and encourage continued construction activities in Lagos State.