The Federal Government of Nigeria has announced that the proposed Tax Reform Bill, once passed into law, will exempt real estate transactions from Value Added Tax (VAT) — a strategic move aimed at lowering the cost of housing and building materials.
This reform seeks to reduce the financial burden on low-income earners while stimulating growth in the construction and real estate sectors.
Speaking at a forum organized by the Council of Registered Builders of Nigeria (CORBON) and the Housing Development Advocacy Network (HDAN), Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, detailed the bill’s far-reaching impact.
Key Features of the Tax Reform Bill
“There will be no VAT on land, real estate sales, or rent,” Oyedele noted, addressing long-standing areas of confusion and controversy in the sector.
He also outlined additional relief measures, such as stamp duty exemptions for rents below ₦10 million per month and capital gains tax exemptions on the sale of residential properties.
These initiatives are designed to make housing more affordable and tackle persistent tax issues in the real estate space.
Supporting Local Production and Growth
The bill also proposes targeted incentives for priority sectors, especially the local production of building materials like non-metallic products, to bolster Nigeria’s manufacturing capacity.
Oyedele said the reforms will cover land transactions and property registration, including efforts to harmonize property taxes and simplify procedures, ultimately reducing costs and inefficiencies.
“The goal is to ease the tax burden on tenants and make housing more accessible. Beyond that, it’s about boosting economic activity in construction and across the broader economy,” he explained.
Combating Misinformation and Raising Public Awareness
Oyedele encouraged the public to seek reliable information and avoid falling for social media misinformation.
“This bill has significant benefits, but some misconceptions are being spread. It’s important that people understand the actual content and intent,” he said.
Also weighing in, Minister of Housing and Urban Development Ahmed Dangiwa described the bill as a potential game-changer for construction firms and contractors. Represented by Temitope Gbemi, Director of Public Buildings, Dangiwa said the ministry has aligned its policies with the reform agenda to promote fairness, clarity, and investor confidence in the housing market.
Legislative Progress
The House of Representatives recently passed four key tax bills, including the Tax Reform Bill, aimed at accelerating economic growth. Initially submitted by the Executive in October 2024, the legislation underwent detailed scrutiny during a clause-by-clause review.
The Senate is expected to begin deliberation on the bill following the Eid-El-Fitr and Easter recess — a major step toward its final passage.
If enacted, the bill will remove VAT from real estate transactions, provide production incentives, and streamline property taxation, paving the way for a more affordable housing market and stronger economic performance in Nigeria.
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