The Federal Government of Nigeria has said that the Tax Reform Bill, once enacted, will exempt real estate transactions from Value Added Tax (VAT), a move aimed at reducing the cost of building materials and housing.
This reform is expected to ease the financial burden on low-income earners and stimulate 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, outlined the bill’s transformative potential.
Key Provisions of the Tax Reform Bill
“There will be no VAT on lands, the sale of real estate, and rent is exempted from VAT. Some of these have been areas of controversy in the past,” Oyedele stated.
He further highlighted additional tax relief measures, including the exemption of stamp duties for rents below N10 million per month; Capital gains tax exemptions on the sale of dwelling houses.
These provisions are designed to make housing more affordable and accessible to Nigerians, while also addressing long-standing tax-related challenges in the real estate sector.
Boosting Production and Economic Growth
The bill also includes priority sector incentives for the production of building materials, particularly non-metallic products, to enhance local manufacturing capacity.
Oyedele emphasized that reforms will extend to land transactions, including titling and the harmonization of property taxes, to streamline processes and reduce costs.
“The Tax Reform Bill will improve the affordability of housing. It will provide relief for people paying rent by removing a significant portion of the tax burden.
“The essence is to make life better for everyone and stimulate economic activities in the building and construction sectors, and by extension, the entire economy,” Oyedele explained.
Addressing Misconceptions and Encouraging Awareness
Oyedele urged Nigerians to seek accurate information about the reforms, cautioning against misinformation spread through social media.
“This bill has many benefits, but it is being misconceived by some people. It’s important to understand the facts,” he said.
Adding to the discussion, Ahmed Dangiwa, Minister of Housing and Urban Development, expressed strong support for the bill, describing it as a game-changer for construction firms and contractors.
Represented by Temitope Gbemi, Director of Public Building, Dangiwa noted that the ministry has aligned its housing policies with the fiscal reforms to ensure clarity, equity, and investor protection in real estate and housing investments.
What you should know
The Nigerian House of Representatives recently passed four key tax reform bills, including the Tax Reform Bill, aimed at propelling Nigeria’s economy.
- Initially submitted to the National Assembly by the Executive in October 2024, the bills underwent a clause-by-clause review at the Committee of the Whole.
- The Nigerian Senate is now set to deliberate on the bill following the completion of the Eid-El-Fitr and Easter holidays, marking a significant step toward its enactment.
By removing VAT on real estate transactions, introducing incentives for building material production, and streamlining property taxes, the Tax Reform Bill is poised to revolutionize Nigeria’s housing sector, making homes more affordable and boosting economic growth.
