The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has confirmed that Value Added Tax (VAT) has been removed on land, buildings and rent under the Nigeria Tax Act 2025, a move he said will ease housing costs and support tenants and property investors.
Oyedele told journalists that the new law — which took effect in January 2026 — specifically exempts buyers of land and completed buildings from paying VAT on those transactions.
He added that both residential and commercial rent will also be free from VAT.
“Land and buildings are specifically exempt from VAT under the new tax regime,” Oyedele said. “This means individuals buying land or completed buildings will no longer pay VAT on such transactions. The exemption also applies to rent.”
The committee chairman said the removal of VAT is expected to lower overall property costs and ease the financial burden for Nigerians seeking housing or looking to invest in real estate.
He explained that the law also allows contractors to recover VAT paid on construction materials and services through input VAT credits, which should reduce building expenses.
Oyedele dismissed widespread false claims that the new tax law would introduce a 25 per cent tax on building materials, bank balances or business expenses.
“Contrary to the misinformation seeking to create fear, panic and disaffection, the Nigeria Tax Act 2025 … does not impose a 25 percent tax,” he said.
Under the law, mortgage interest paid by individuals building owner-occupied homes is tax-deductible, and landlords can deduct expenses such as repairs and insurance before calculating tax.
Tenants can also claim rent relief of up to ₦500,000, capped at 20 per cent of their annual rent, to help make accommodation more affordable.
The tax reforms, he claims, aim to stimulate real estate investment, support small businesses, reduce housing costs and attract more development in the property sector.
