by Babajide Okusaga & Company
If you’ve been following recent economic reforms in Nigeria, you’ve probably heard about the new tax laws being proposed under the Presidential Fiscal Policy and Tax Reform Committee.
But what does all of that mean for the real estate industry?
As a developer, investor, Real estate consultant, or house-hunter, these new rules could reshape how you build, buy, and sell property in Nigeria. Let’s break it down without the legal jargon.
1. No More VAT on Real Estate Transactions.
One of the boldest moves in the proposed Tax Reform Bill is the exemption of Value Added Tax (VAT) on real estate transactions.
In simple terms:
No VAT on land purchases
No VAT on rent
No VAT on property sales
This is huge. For years, Nigerians have paid additional fees on top of already expensive real estate transactions making housing even less affordable. By removing VAT, the government is cutting down the total cost of owning or renting property, especially for low- and middle-income earners.
2. Building Materials Could Get Cheaper (And That’s Good News for Developers)
The reform also includes incentives for producers of building materials, especially non-metallic items like cement, tiles, and blocks. These companies may be granted priority sector benefits, meaning lower taxes or easier access to funding.
This could:
Reduce construction costs
Encourage local production
Lower home prices (eventually)
For developers, this is the kind of boost that could unlock stalled projects and make affordable housing more viable.
3. Stamp Duty Relief on Rentals Below ₦10 Million
Stamp duty will be waived on rent agreements below ₦10 million per year.
This directly affects:
Tenants in mid-income housing
Landlords trying to attract steady renters
Agents working in budget-friendly areas
It’s a subtle but impactful shift that promotes fairness and reduces friction in the rental market.
4. Clarity and Simplicity
One thing investors hate? Uncertainty. Nigeria’s previous tax system has been full of grey areas, conflicting laws, and hidden charges. The new reform aims to harmonize property taxes, streamline land titling processes, and eliminate duplication between agencies.
The result?
Less red tape
Clearer rules
Faster transactions
This is music to the ears of both local and diaspora investors, many of whom have held back due to concerns about documentation, double taxation, or lack of transparency.
5. A Boost for Affordable Housing Projects
Government officials have stated that one key goal of this tax reform is to make housing more accessible for low-income Nigerians. By easing the tax burden on developers, promoting local materials, and scrapping VAT on rent, the path is being cleared for affordable housing to actually be affordable.
Now, this doesn’t mean home prices will drop overnight, but it creates room for more inclusive development in the long run.
So, What Does This All Mean for You?
If you’re a:
Buyer→ You could save more on the final cost of acquiring a home.
Renter→ No VAT and lower stamp duty = less financial strain.
Developer → Incentives may reduce construction costs and increase ROI.
Investor→ Clearer, fairer tax policies.
In Conclusion:
Yes, we’ll need to wait for full implementation to see the real impact. But if the promises hold, this could be the most investor-friendly shift we’ve seen in years.
Source: BabajideOkusaga.com
