Nigeria’s newly introduced tax law is being described as a game-changer for the real estate sector, with experts highlighting its far-reaching benefits for home buyers, renters, developers, and investors.
One of the biggest advantages is the removal of value-added tax (VAT) on land and residential property sales, including rental transactions. This is expected to reduce overall construction costs and make housing more affordable. “This law creates real cost savings for buyers and renters. Exempting residential property from VAT lowers transaction costs and reduces the burden of rent and purchase,” an industry expert explained.
The law also provides capital gains tax exemptions on the disposal of personal residential properties, creating opportunities for homeowners to save more when selling. Another provision exempts leases below ₦10 million per month from stamp duty, a move that eases the burden on tenants. In addition, benefits in kind (BIK) valuation for individuals has been capped at 20 percent of annual salary, ensuring more predictable taxation.
Developers and construction firms are also expected to benefit significantly. Imported building materials, which form a large part of Nigeria’s construction costs, are now VAT-exempt. “For developers, this is a huge relief. The removal of VAT on input materials will directly lower costs and, by extension, make housing projects more viable,” one stakeholder noted.
Small and local contractors will now pay a lower withholding tax (WHT) of 2 percent, down from 2.5 percent, while foreign contractors will pay 5 percent. For investors and real estate investment trusts (REITs), the law introduces a WHT exemption on dividend distributions, a measure that experts say will attract fresh capital into the sector.
Real estate investors believe the reforms could spark renewed activity in commercial property markets as well. “There will be a significant boost in investor participation because the law eases tax burdens and encourages long-term commitments in real estate,” an analyst said.
Industry leaders also stressed the importance of aligning tax reforms with better land administration. “Real estate in Nigeria is locked-down wealth. If states ensure proper land title registrations, it will improve financial systems, attract investments, and strengthen mortgage insurance,” a developer observed.
The consensus across stakeholders is that the new tax law not only reduces costs for individuals and institutions but also positions real estate as a stronger driver of economic growth. “These reforms are unlocking opportunities that will enhance home ownership, expand mortgage access, and deepen investment in Nigeria’s property market,” another stakeholder emphasized.
