The Federal Government has announced the removal of Value Added Tax (VAT) on land, buildings, and rent following the implementation of the Nigeria Tax Act 2025.
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, confirmed that the new law exempts transactions involving land, completed buildings, and rental payments from VAT.
This means that buyers of land and finished properties, as well as tenants paying rent for residential or commercial properties, will no longer be required to pay VAT on those transactions under the revised tax framework.
Law Already in Force
According to Oyedele, the tax reform law took effect in January 2026 and is already operational across the country.
Purpose of the Reform
The VAT exemption forms part of broader fiscal reforms aimed at reducing the cost of housing, easing financial pressure on tenants, and stimulating investment in Nigeria’s real estate sector. The government believes the move will improve affordability and encourage more participation in property development.
Misinformation Debunked
Oyedele and the tax reform committee have also dismissed claims circulating in some quarters that the new law introduces a 25 per cent tax on building materials, construction funds, or bank balances. He described such reports as false and misleading, urging the public to rely on verified information.
Mixed Reactions from Stakeholders
While the reform has been welcomed in many quarters, some property sector stakeholders argue that removing VAT alone may not significantly reduce rent or overall housing costs. They note that factors such as inflation, construction costs, and foreign exchange fluctuations continue to influence property prices in Nigeria.
What the Reform Means in Practice
With the new policy in place:
Buyers of land and completed buildings will no longer pay VAT on those transactions.
Tenants should not be charged VAT on rent payments.
Developers may benefit from additional incentives, including input VAT credits on construction expenses and possible tax deductions on mortgage interest, depending on implementation guidelines.
The VAT exemption marks a significant shift in Nigeria’s tax and housing policy, with expectations that its full impact will become clearer in the coming months.
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