Property Identification Exercise and Oyo State Land Use Charge

Property Identification Exercise
and Oyo State Land Use Charge
by
Dr. Muyiwa Gbadegesin
Special Adviser (Projects)

• The State has an area
of 28, 454 km2
• The State was created
on 3rd February 1976
• Population of about
5.6 million (2006)
OYO STATE
2Office of The Special Adviser (Projects)

Background: Poor Land Revenue Collection
Systems
• Uncoordinated tax collection system
• Multiple taxation
• Porous and corrupt collection processes
• Manual paper-based billing system based on
arbitrary assessment
• Lack of database on the hundred of thousands of
properties statewide
• Most property owners evade taxes and therefore
made no contribution to maintenance of public
infrastructure supporting those properties

Challenges
• Gathering and utilization of reliable data for
taxation and planning
• Lack of up to date paper or digital maps
• Huge number of properties (500,000 estimated
individual physical structures)
• 90 percent of properties without registered
title therefore government has no record of
ownership, valuation, use etc.

Land Use Charge requires Property Enumeration
Exercise to Identify All Properties
• There is much more to Land Use Charge (LUC) than
enumeration, but it forms the basis upon which the
entire project is hinged on.
• Enumeration is necessary because there are few
records as to number and ownership of properties in
Oyo State.
• Enumeration serves two purposes:
– Vital background information required for more detailed
planning is obtained
– Real and valuable data is being collected, thereby reducing
time to be spent on the LUC project when it eventually
kicks off

What Are We Trying To Do?
• Generate land use charges revenues
• Generate Tax Notices quickly and accurately
• Track tax payments
• Track spatial, ownership, assessment,
payment and document history

Existing Situation
• The Nigerian Constitution and existing laws prevented the
State from establishing a consolidated Property Tax
because:
– The State (2nd Tier of Government) is entitled to
Ground Rents and Neighbourhood Improvement
Charges
– The Local Government Areas (3rd Tier Or Municipal
Governments) are entitled to collect Tenement Rates
– The State was not well organized while the LGA’s were
even less so and collections by both levels were
fraught with “leakage” and corrupt practices

Existing Situation:
State & LGA’s Collections
• In 1997 the World Bank estimated that
– State Governments in Nigeria collected less than 5% of
the Land Related revenues to which it was entitled
– the LGA’s were believed to collect less than 25% of
possible Tenement Rate revenues
• Lack of adequate data and human capacity to properly
capture revenue
• Prevalence of property tax evaders

Strategy:
Land Use Charges Consolidation
• To be effective, collection of Tenement Rates, Ground
Rents and Neighborhood Improvement Charges must
be reorganized
• The Oyo State Government seeks to use available
technology to automate the rapid acquisition and
processing of data for property taxation thereby
enabling transparent billing and tracking of resulting
payments and revenue

The Land Use Charge Solution
• The following steps must be taken:
– Preparation of the Legislation Consolidating all Land
Related Charges into a Single Charge
– Preparation of digital mapping on a regular basis
(based on satellite imagery)
– Acquisition of data relating to existing properties and
ownership (the Property Identification Exercise or PIE)
– Development of automated billing system to generate
and deliver bills
– Development of a portal to enable online access to bills
and online payment of Land use charge

The LUC Solution
• Essential elements of the proposed Land Use Charge system
– Data to be secure and away from undue influence
– Money collection by the Banks to eliminate corruption
opportunities
– Data to be gathered in the field to ensure completeness
and accuracy
– Topology and Geographic Information Systems (GIS) to
form basis of the systems
• A private sector Trustee ensures that the LGA’s and the
Consultant are paid as prerequisite to receipt of funds by the
State Government

The First Step is to Acquire and Process Maps
An example of Satellite Imagery used to for PIE in Lagos

Mapping Was Used To Create Topology and Identify
Buildings
Each Plot
and Building
was
uniquely
identified

Field Sheets
Each 200 m square of Lagos
has its own unique identifier
Each Building and Plot is
similarly identified uniquely
Larger Field sheets are
available as necessary to assist
the Field Crews

LRIS Example Slide
Plots can be identified from the Satellite Imagery
Land ownership (tax
responsibility) comes from the
Registry of Land Titles
Most properties are
untitled/unregistered
Immediate data will be gathered
using door to door enumeration

Prop ID: No 20003349
Address: 10 Ayo Rosiji Street
GRA Ikeja
Occupant: Cadbury Nigeria Ltd.
LGA: Ikeja
Owner: Chief Yinka Rhodes
6 Ayo Rosiji Street
Ikeja, Lagos
Example In Ikeja: Data will be tied in to the mapping for easy
implementation of collections

Unique ID
• Every enumerated property in the State
now has and identification plaque and
unique number
3 Inches
1Inch

Objectives of LRIS
– First objective of the LRIS is to automate printing
of demand notices for Land Use Charge for the
State
– The data and system will be used to print demand
notices for Land Use Charge which is a single
unified land fee with resulting revenues shared
between the LG’s and the State

The LRIS can be used for:
•Land Information Certificates
•Revalidation of Existing Land Titles
•Issuance of new Land Titles
•Processing of Further Transactions
on Land
•Developmental Planning

Calculation Of LUC Billings
• The Formulae is defined in the Legislation enacting the
Land Use Charge
• The Formulae is designed to estimate Property Values on
a generalized basis
• It calculates the value of the Land first, then the value of
the building after which it adds the two together and
finally factors are applied to account for building quality
• The Land Use Charge is calculated by applying a
percentage depending on use
• The values for Land use Charge are automatically
generated from the database and associated software.

Enumeration Plan
• This proposal is written on the assumption that there are 500,000
properties in Ibadan with 100,000 of these being High Value properties
(GRAs, planned areas and commercial and industrial properties)
• The enumeration exercise will take 12 months and will be carried out in
progressive phases:
– Phase 1 (month 1-3): Enumeration and fact-finding focused on High Value
properties
– Phase 2 (month 4-9): Scaling up of the exercise by addition of more
enumeration teams
– Phase 3 (month 10-12): Clean up
• Data entry will be done on a daily basis in parallel with the enumeration
such that LUC bills can be issued without waiting for completion of the
exercise
• 100,000 properties would have been enumerated by the end of 12 months

Phase 1: First 3 months
(Enumeration plus Fact-finding)
LOCATION NO. OF TEAMS
ENUMERATING
SIMULTANEOUSLY
TOTAL NO. OF
PROPERTIES EXPECTED
FROM ALL TEAMS
WITHIN 3 MONTHS
Location 1 2 teams enumerating 30
properties per day
3,600
properties per day
3,600
TOTAL 4 7,200

Phase 2: Second 3 months
(Enumeration Only with additional teams)
ENUMERATING
SIMULTANEOUSLY
TOTAL NO. OF
PROPERTIES EXPECTED
FROM ALL TEAMS
WITHIN 3 MONTHS
properties each per day
12,000
12,000
12,000
12,000
TOTAL 48,000

Phase 3: Third 3 months
(Enumeration Only)
ENUMERATING
SIMULTANEOUSLY
TOTAL NO. OF
PROPERTIES EXPECTED
FROM ALL TEAMS
WITHIN 3 MONTHS
12,000
12,000
12,000
12,000
TOTAL 48,000

Phase 4: Fourth 3 months
(Clean-up and Re-enumeration)
ENUMERATING
SIMULTANEOUSLY
TOTAL NO. OF
PROPERTIES EXPECTED
FROM ALL TEAMS
WITHIN 3 MONTHS
6,000
6,000
6,000
6,000
TOTAL 24,000

Enumeration Summary
• Duration of the enumeration exercise 12
months
• Total No. of numerators required 20
• Number of enumerated properties 127,000

Result of Enumeration
– The Enumeration Exercise will produce data that
will form the core of a computerized Land
Related Information System (LRIS) and cadastre
to be used for purposes of planning and taxation
– A Cadastre is a land and property based
information system to manage land
administration, planning and taxation.
– It will consist of High Quality Mapping connected
to a sophisticated Data Base containing Property
Ownership information

Financial Perspective
• Conservatively it is estimated that there are
approximately 100,000 residential,
commercial and industrial property taxation
units within Metropolitan Lagos.
• If an average of N25,000 per year is collected
per property, when the Project is fully
implemented in 3 years time property tax
revenue will be N2.5 Billion annually.

THANK YOU

Property Identification Exercise and Oyo State Land Use Charge

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