Many Nigerians believe that selling a personal asset such as a house, car, or valuable possession is automatically tax-free. However, the Nigeria Tax Act (NTA) 2025 introduces specific conditions, thresholds, and limits that determine whether gains from such sales are exempt from tax or included in an individual’s taxable income.

The reforms form part of a broader effort to simplify Nigeria’s tax system and align the treatment of gains with the wider income tax framework.

According to a publication by PwC, the new law introduces limits on exemptions for principal private residences, personal chattels, and motor vehicles, while also changing how gains are taxed.

Tax professional Tomi Akinwale explained that gains from the sale of personal assets can carry tax implications, although not every gain will be taxable.

“Thresholds matter, and context determines the tax outcome,” he said.

Can You Sell Your Home Without Paying Tax?

One of the major reliefs under the Act relates to a taxpayer’s principal residence.

Section 51 of the Nigeria Tax Act exempts gains arising from the disposal of a dwelling house and up to one acre of adjoining land, provided the land is not used for commercial purposes.

However, the exemption comes with important conditions.

The relief can only be claimed once during an individual’s lifetime. This means that a taxpayer who has already benefited from the exemption on the sale of one qualifying residential property may not be able to claim it again on another home sale.

The Act also addresses mixed-use properties. Where a building is used partly as a residence and partly for business purposes, only the residential portion may qualify for the exemption. Similarly, where only part of a qualifying property is sold, the proceeds must be apportioned accordingly.

According to PwC, these provisions establish clearer limits to what many taxpayers previously considered a blanket exemption for residential property sales.

What Happens When You Sell Personal Belongings?

The Act also introduces clearer rules for the disposal of personal chattels.

Personal chattels include movable personal property such as jewellery, artwork, household items, collectibles, and other valuable possessions.

Under Section 52 of the Act, gains from the disposal of these assets are exempt only where the total consideration does not exceed N5 million or three times the annual national minimum wage, whichever is higher.

This marks a significant increase from the former Capital Gains Tax Act, which provided a much lower exemption threshold of N1,000 for personal and domestic effects.

As a result, ordinary personal transactions may remain exempt, but high-value disposals could attract tax liabilities depending on the value involved.

The law also contains anti-avoidance measures. Multiple assets sold to the same buyer, connected persons, or persons acting together may be treated as a single transaction for tax purposes, preventing taxpayers from splitting sales to remain below the exemption threshold.

Are Gains from Selling Your Car Taxable?

Section 53 of the Nigeria Tax Act provides a specific exemption for private vehicles.

Under the provision, a motor vehicle used solely for private or non-profit purposes is not treated as an asset for calculating taxable gains.

However, the exemption is not unlimited.

The Act restricts the relief to a maximum of two privately used vehicles disposed of by an individual within a year of assessment.

This means individuals selling one or two personal vehicles annually may benefit from the exemption, while additional disposals could attract closer scrutiny from tax authorities.

Akinwale noted that the provision is designed to provide relief for genuine personal-use vehicles while discouraging repeated sales that resemble commercial trading activities.

Why Are These Changes Being Introduced?

The reforms are part of the government’s wider strategy to improve revenue mobilisation and close loopholes in the tax system.

PwC stated that the new framework aligns the taxation of gains more closely with the broader income tax regime while reducing opportunities for tax arbitrage.

For taxpayers, this means understanding the nature of an asset, the applicable exemption, and the value of a transaction has become increasingly important.

Individuals can no longer assume that every personal asset sale automatically qualifies for tax relief.

What Taxpayers Should Do Before Selling an Asset

Experts advise taxpayers planning to dispose of valuable assets to maintain proper records, including:

• Acquisition costs
• Renovation or improvement expenses
• Valuation reports
• Sale agreements
• Other transaction-related documents

These records may be necessary to determine whether a gain qualifies for exemption and, where tax applies, how much tax is payable.

The Nigeria Tax Act 2025 preserves key exemptions for genuine personal-use assets but introduces clearer rules on eligibility and qualifying conditions.

For homeowners, the principal private residence exemption remains available but can only be used once in a lifetime. For personal belongings, the value of the transaction determines eligibility for relief. For vehicle owners, the exemption applies to a maximum of two private vehicles per year.

As Nigeria moves toward a more integrated tax framework, individuals planning to sell valuable assets should carefully consider the tax implications before completing any transaction.

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Nigeria’s shortlet market, particularly in , is entering a new phase of slower growth as regulatory crackdowns, tax reforms, and rising competition reshape the once fast-expanding sector.

A new report by projects the Lagos shortlet market will grow modestly to ₦285.5 billion in 2026, signaling a slowdown from previous rapid expansion.

In 2025, the market generated ₦281.03 billion—below earlier projections of ₦300 billion—highlighting early signs of deceleration.

Regulation emerges as key disruptor

One of the biggest shifts came with the ban on shortlet operations in in February 2026 due to security concerns.

Analysts warn this move could trigger similar restrictions across high-end areas like:

This regulatory tightening is expected to reduce listings and compress revenues in premium locations.

Tax reforms reshape the market

The introduction of the , effective January 2026, is also influencing the sector by increasing compliance requirements and formalising operations.

Experts say the reforms could bring long-term stability, even as they create short-term pressure for operators.

Rising competition and shifting demand

The rapid increase in shortlet supply—especially in areas like Lekki Peninsula—has intensified competition and lowered occupancy rates for poorly managed properties.

At the same time, more travellers are opting for hotels, citing better service consistency, security, and reliability.

Mainland markets gain momentum

While high-end Island locations remain lucrative, mainland areas are emerging as strong alternatives:

• recorded 25% growth
• grew by 23.1%
• and maintained steady demand

These areas are attracting investors and guests seeking more affordable and balanced options.

Market enters a “discipline phase”

Industry leaders say the sector is transitioning from rapid expansion to a more structured and competitive environment.

Success will now depend on:

• Strong hospitality standards
• Cost efficiency
• Regulatory compliance
• Brand positioning

Outlook remains positive

Despite the slowdown, Nigeria’s real estate sector continues to play a major role in the economy, contributing over 13% to GDP.

Analysts believe that while growth is moderating, the long-term outlook remains strong, driven by urbanisation, business travel, and diaspora demand.

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The Presidential Fiscal Policy and Tax Reforms Committee has dismissed reports that the Nigeria Tax Act 2025 imposes a 25 per cent tax on building materials, construction funds, and related bank transactions.

The clarification was contained in a statement issued on Sunday and shared by the committee’s chairman, Taiwo Oyedele, following a viral video by former Minister of Transportation, Rotimi Amaechi.

According to the committee, the new law has already taken effect and does not contain any provision imposing a 25 per cent levy on construction materials, bank balances, or business expenses linked to property development.

The panel described the claims circulating online as false and misleading, stressing that the law is structured to reduce housing costs, stimulate real estate development, and provide relief to tenants and small-scale contractors.

Committee’s Position

The committee directly addressed the statements made in the viral video, saying they were based on inaccurate interpretations of the new tax framework.

It stated that the Nigeria Tax Act 2025 does not impose a 25 per cent charge on construction funds, bank accounts, or business transactions. Officials warned that such misinformation could create unnecessary panic among investors, developers, and the general public.

In the video, Amaechi alleged that payments for building materials would attract a 25 per cent deduction and that the burden would ultimately be transferred to tenants and property buyers. The committee, however, insisted that no such provision exists in the law.

Background to the Debate

The clarification comes amid heightened political commentary ahead of the 2027 general elections, with some public figures raising concerns about potential economic hardship under new fiscal policies.

The committee said the Nigeria Tax Act 2025 forms part of a broader reform agenda aimed at simplifying tax administration, expanding the tax base, and offering targeted incentives to priority sectors, including housing and real estate.

Key Reliefs in the Law

According to the committee, the new tax framework introduces several incentives designed to lower construction and housing costs.

• Land and buildings are exempt from Value Added Tax, reducing acquisition and transaction costs.

• Contractors can recover input VAT on qualifying materials, equipment, and overheads.

• Withholding tax on construction contracts has been reduced to 2 per cent to improve cash flow for developers.

• Individuals building owner-occupied homes can deduct mortgage interest for tax purposes.

• Landlords can deduct repair, insurance, and agency costs before calculating taxable rental income.

The law also includes direct relief for tenants and incentives for investors.

• Rent relief of up to ₦500,000, capped at 20 per cent of annual rent.

• VAT exemption on residential rent.

• Stamp duty relief on qualifying lease agreements.

Effective Date

The committee noted that the Nigeria Tax Act 2025 and related reforms became effective on January 1, 2026, after being signed into law in June 2025. The reforms are expected to provide a new framework for taxation, administration, and revenue generation in the country.

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The introduction of a new 30 percent Capital Gains Tax (CGT) under the Nigerian Tax Act 2025 has stirred widespread reactions across the country’s corporate sector.

The updated guidelines set specific thresholds aimed at easing the burden on smaller transactions. For example, a N150 million threshold now applies to the sale of shares in Nigerian companies. In practical terms, if the total sale value in a year is below N150 million and total gains from asset sales are under N10 million, the company will be exempt from CGT.

While analysts continue to debate the broader economic implications, the new policy marks one of the most significant shifts in Nigeria’s tax landscape in recent years raising questions about its potential effects on investment flows, mergers, and corporate restructuring.

Under the revised CGT framework, firms that record annual share sales below ₦150 million and total asset gains under ₦10 million are exempt. However, larger corporates and listed entities are expected to bear the brunt of the 30 percent levy on qualifying capital gains prompting many to seek lawful, strategic ways to minimize exposure.

Experts suggest several compliance-driven approaches. One is transaction timing, spreading asset disposals across fiscal years to stay within exemption limits. Another is corporate restructuring, where businesses can utilize holding companies or special purpose vehicles (SPVs) to manage equity transfers more efficiently. Companies can also explore intragroup transactions, which, when properly documented and justified, may qualify for deferral or reduced tax exposure.

Tax professionals further advise that organizations take advantage of loss offsets, allowing capital losses from previous years to reduce taxable gains. Engaging in asset revaluation or merger-based consolidations can also help reposition assets under less taxable categories, provided such moves meet the Federal Inland Revenue Service (FIRS) compliance requirements.

Ultimately, experts warn that aggressive tax avoidance could trigger audits and penalties, but strategic tax planning, transparency, and expert advisory remain legitimate tools for navigating the new CGT regime. For Nigeria’s corporate sector, the key to surviving the 30 percent tax lies not in evasion, but in precision.

Source: Business Day

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Nigeria’s new Tax Act will take effect come January 2026, ushering in one of the most significant overhauls of the nation’s fiscal framework in decades. Designed to align with global standards, the law is expected to reshape the real estate and housing finance landscape but experts warn its success hinges on effective implementation, transparency, and consistent engagement.

A New Era for Real Estate and Property Investment

The Nigeria Tax Act 2025 introduces tougher anti-evasion measures, including a “top-up tax” on multinational corporations, stricter Controlled Foreign Company (CFC) rules, and more comprehensive definitions of taxable capital gains. Though primarily targeting foreign entities, these provisions will reverberate through Nigeria’s property sector, where many large projects rely on offshore financing through Special Purpose Vehicles (SPVs).

Developers could face higher taxes and tighter reporting requirements under the Federal Inland Revenue Service (FIRS), while property disposals will now attract Capital Gains Tax (CGT) on actual profits closing long-standing loopholes that allowed tax avoidance through share transfers instead of asset sales.

Stamp Duties and Luxury Property Tax

One major flashpoint is the adjustment of stamp duties on property leases above ₦10 million, which experts say could further inflate housing costs in cities like Lagos and Abuja. Similarly, a proposed 1.5% annual luxury property tax on high-end homes in areas such as Ikoyi and Maitama aims to increase revenue from wealthy homeowners but may distort the upper property market.

Impact on Developers and Mortgage Institutions

Developers and lenders are bracing for higher compliance costs and thinner margins. While the reforms may initially raise borrowing costs, experts believe long-term gains are possible if revenues are reinvested into housing infrastructure and mortgage credit.

The Real Estate Investment Trust (REIT) segment could also see changes. Though currently enjoying tax exemptions under FIRS rules, inconsistent interpretation of the new provisions could unsettle investors, highlighting the need for regulatory clarity.

Opportunities Amid Uncertainty

According to Ayo Ibaru, CEO of Northcourt, exempting residential properties from VAT and expanding recoverable input VAT to cover construction services could ease cost pressures. He urged the government to complement reforms with tax incentives for green and affordable housing.

Dr. Roland Igbinoba, President of Proptech Nigeria, described the law as transformative but warned of short-term pain. “CGT has moved from 10% to 30%. Developers must plan carefully, but over time, the law will bring greater transparency and predictability,” he said.

Estate valuer Olufemi Oyedele called for targeted reliefs to protect affordability. “Authorities should tax empty houses and channel proceeds into mortgage support for low- and middle-income buyers,” he advised.

Balancing Reform and Reality

Experts agree that implementation will make or break the reform. Without transparent processes, data-driven valuation systems, and active engagement between government and stakeholders, the benefits could be lost to confusion and overregulation.

The new tax regime marks a critical juncture for Nigeria’s real estate industry, one that could either unlock sustainable financing for affordable housing or deepen existing market imbalances, depending on how policymakers strike the balance.

By: CHINEDUM UWAEGBULAM

Source: Guardian

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 Nigeria’s airlines say new government taxes could shut down the sector, as President Bola Tinubu’s reforms reintroduce VAT on air tickets and customs duties on aircraft, engines, and spares from January 1, 2026.

“This policy will kill the airlines within 48 hours,” warned AON Vice Chairman and Air Peace CEO, Allen Onyema, citing thin margins, high FX costs, and multiple existing charges.

Government officials say the move is needed to expand Nigeria’s tax base and harmonise levies but insist there will be “no going back” once the law takes effect.

Operators fear the extra costs will push ticket prices up, reduce demand, and force carriers to ground planes or defer maintenance. A former aviation ministry director cautioned this could create “an undesirable safety outcome.”

Global aviation bodies urge governments to exempt air transport from VAT and import duties. IATA chief Willie Walsh said: “Adding new layers of taxation increases costs and risks, cutting connectivity.”

Analysts recommend phasing in VAT and restoring exemptions for safety-critical parts to protect both revenue and connectivity.

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