How Nigeria’s New Tax Reform Affects Real Estate

Nigeria’s new tax reform, introduced under the 2024 fiscal plan, are designed to strengthen the economy, reduce the cost of living, and boost revenue for states and the federal government. While these changes target every sector, they directly influence how developers, brokers, investors, and everyday buyers approach real estate in 2025 and beyond.

Here’s exactly what these new tax reforms mean for Nigeria’s real estate market, and how to use them to your advantage.

Corporate Tax Cuts Leave Developers With More

One major benefits of the new tax reform is the phased reduction of Corporate Income Tax, from 30% to 27.5% in 2025 and then to 25% in 2026. For real estate developers and brokerage firms, this means higher profit retention.

More money in company accounts means more to spend on new housing projects, road networks, or marketing campaigns that attract buyers.

Developers should review their current tax structure and adjust project budgets to reinvest savings where they deliver the most value.

VAT Exemptions Create Breathing Room for Buyers

Under the new tax reforms, essentials like staple foods, basic education, electricity, healthcare, and public transport are VAT-free. More importantly, parts of the real estate sector now benefit too. Certain transactions and properties are exempt from VAT under the new policy.

This not only reduces daily living costs but can directly lower the total cost of some property deals, making it easier for families to save for land deposits or housing payments, especially in the low- to middle-income segment.

Highlight both the broader VAT relief and the real estate-specific exemption to show buyers how the reforms make owning property more realistic.

Faster Land Deals With New Digital Tax Processing

One of the most frustrating parts of buying land in Nigeria has been the slow, paperwork-heavy tax and verification process.

These new tax reform direct the Nigeria Revenue Service (NRS) and Joint Tax Board to digitize and centralize stamp duties, land use charges, capital gains tax, and title verifications.

As a result, this will lead to faster processing times, fewer delays at registries, less fraud risk, and smoother transactions for buyers and brokers alike.

New Thresholds for Small Investors

Another part of the tax reform raises the personal income tax threshold. Nigerians earning under ₦108,000 per month (₦1.3 million annually) are now exempt from personal income tax.

While this change won’t slash land prices, it leaves more disposable income in people’s pockets, especially young professionals, small business owners, and farmers who want to invest in peri-urban plots or farmland.

Small investors can now plan to enter the real estate market with flexible installment plans or community land banking.

The Development Levy May Raise Future Costs

Of course, there’s a trade-off. The new 2% Development Levy could affect real estate indirectly. Over time, developers may pay more to fund local roads, community facilities, or infrastructure expansion.

Developers should build this extra cost into their feasibility plans and pricing to avoid surprises later.

States Gain More VAT Control

Another big change is that states will now keep a larger share of VAT. High-growth areas like Lagos, Ogun, and Abuja may adjust local taxes, land charges, or permit fees to raise their revenue.

Real estate investors must watch state-level policies closely, not just federal laws.

 Why Land Still Wins as a Safe Haven

Even as taxes change, land remains one of Nigeria’s best hedges against inflation. Unlike cars or buildings that lose value over time, land stays steady and usually appreciates faster than inflation. Add the fact that it’s still taxed less heavily than other assets, and it’s easy to see why more investors will keep “parking” their wealth in land.

How to Make the Most of the New Laws

• Developers: Use corporate tax cuts to expand your projects and fund better services.
• Brokers: Educate clients about the real impact of VAT savings.
• Investors: Secure land now, before states tweak local fees.
• Marketers: Highlight the Real Estate New Tax Laws in your promotions to show buyers why now is the smart time to act.

Conclusion

Nigeria’s new tax reform will reshape how people buy, sell, and develop property in Nigeria. If you understand the changes and act early, you’ll stay ahead of rising costs and unlock more value from your investments.

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