By Ghazali Ibrahim
The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has confirmed that Value Added Tax (VAT) will no longer apply to land, buildings and rent under the newly enacted Nigeria Tax Act 2025.
The law has already taken effect, and the provisions are aimed at making housing more affordable and stimulating growth in the property sector.
Oyedele explained that buyers of land or completed buildings will not pay VAT on those transactions, and both residential and commercial rent are fully exempt from the tax, easing financial pressure on tenants and property investors across the country.
He said the exemption on these real estate elements is expected to reduce overall housing costs and encourage greater investment in the sector.
In addition to the VAT exemptions, the tax law allows contractors to recover input VAT paid on materials and services, reduces the withholding tax rate on construction contracts to two per cent, and offers tax-deductible mortgage interest for individuals building owner-occupied homes.
Oyedele also addressed misinformation circulating online about other supposed taxes, clarifying that the new law does not impose a 25 per cent levy on building materials, construction funds or bank balances, and there is no postponement of implementation to 2027.
The VAT exemption on rent and property sales is part of a broader set of reforms under the Tax Act intended to boost housing affordability, attract investment into real estate, and increase disposable income for low-income earners.
Other incentives include capital gains tax exemptions on dwelling house disposals and support for local manufacturers of construction materials.
