In June of this year, the State government sent shockwaves through the construction and real estate industry by announcing a 100 percent increase in building planning permit rates. The decision, which sparked significant controversy and concern, has now been partially reversed, as the government recently revised the rates downwards. The official reason for this move was to align the rates with the recommendations of built environment professionals.
According to government sources, the rates have been reduced by 40 percent. While this adjustment appears significant, professionals in the field, especially town planners represented by the Nigerian Institute of Town Planners (NITP), are urging the state government to consider further reductions in order to encourage voluntary compliance.
The initial 100 percent rate hike was introduced during a challenging economic period marked by exchange rate fluctuations, cost-push inflation, and escalating prices of building materials. This move was met with widespread concern as it was expected to have a negative impact on the real estate sector’s contribution to the Gross Domestic Product (GDP) and reduce construction activities.
The revised rates are categorized into four zones within the state. In Zone one, which includes Eti-Osa, rates for building permits now stand at N320 for ground to the fourth floor, N600 for five to 10-floor buildings, and N1,000 for structures with 11 floors and above. Residential units in this zone are charged at N1,000,000, with a stage fee of 40 percent.
For Zone two, which encompasses Lagos Island, Kosofe, Somolu, Surulere, Oshodi-Isolo, Lagos Mainland, Apapa, Amuwo-Odofin, Ibeju-Lekki, and Ikeja, the new rates are set at N200 for ground to four-floor buildings, N500 for five to 10-floor buildings, and N800 for buildings with 11 floors or more.
Zone three, which covers Mushin, Ojo, Ikorodu, Alimosho, Agege, and Ifako-Ijaiye, sees rates of N150 for ground to four-floor buildings, N400 for five to 10-floor buildings, and N600 for structures with 11 floors and above.  In Zone four, which includes Epe, Badagry, and Ajegunle, the rates have been adjusted to N100 for ground to four-floor buildings, N300 for buildings with five to 10 floors, and N500 for those with 11 floors or more. The 40 percent reduction in staging fees applies uniformly across all zones.
In summary, the Lagos State government’s decision to reduce the recently hiked building planning permit rates by 40 percent comes as a welcome relief to the construction and real estate industry. This adjustment, prompted by concerns from industry professionals, aims to strike a balance between government revenue and the economic realities faced by property owners, developers, and investors. It is a step towards fostering voluntary compliance and maintaining the vibrancy of the real estate sector in Lagos State.