The Nigeria Tax Act 2025 property rules have applied since 1 January 2026, and they change what Abuja owners, sellers, buyers, and tenants owe. Capital gains on property are no longer taxed at a flat 10% for individuals. Rent and property sales are VAT-exempt.
Tenants can claim a new rent relief. Rental income is also far easier for the tax authorities to track.
This guide sets out what the Act says, where published summaries disagree, and what to check before your next sale, lease, or purchase. It is general information, not tax advice.
What the Act Changed for Property
President Bola Tinubu signed the Act on 26 June 2025, and it took effect on 1 January 2026. It repeals the Capital Gains Tax Act, Personal Income Tax Act, Companies Income Tax Act, VAT Act, and Stamp Duties Act. One statute now replaces all five.
For property, that puts rental income, sales, stamp duties, VAT, and tenant reliefs under a single law. The Nigeria Revenue Service, formerly FIRS, is the main federal tax authority. Some property taxes, such as stamp duty on deals between individuals, can still go to state-level offices.
If You Rent Out Property: Landlord Tax
Rent counts as income. Section 4 of the Act lists rents among chargeable income. For individuals, it is added to total income under section 28 and taxed at progressive rates. The reported bands under the Fourth Schedule are:
| Annual chargeable income | Rate |
|---|---|
| First ₦800,000 | 0% |
| ₦800,001 to ₦3 million | 15% |
| ₦3,000,001 to ₦12 million | 18% |
| ₦12,000,001 to ₦25 million | 21% |
| ₦25,000,001 to ₦50 million | 23% |
| Above ₦50 million | 25% |
A landlord with other income can move into a higher band once rent is added. Companies pay at the company rate. Under section 56, small companies pay 0% and other companies pay 30%. Companies that are not small also pay a 4% development levy on assessable profits under section 59.
Three practical points matter for landlords:
- No VAT on rent. Residential and commercial rent are VAT-exempt, so do not add VAT to a rent invoice.
- Keep cost records. Commentary on the Act says landlords can deduct costs such as repairs, insurance, and agency fees. Keep every invoice.
- Check who pays you. If your tenant is a company, it may deduct tax at source before paying you. Ask for evidence of any deduction.
Yields quoted in our ranking of the best Abuja neighborhoods for rental income are gross figures. Tax comes after them.
If You Sell: Capital Gains Tax on Property
The flat 10% rate is gone for individuals. Under section 28, an individual’s chargeable gains are added to total income. They are then taxed at the same progressive rates, up to 25%. Companies pay the company rate of up to 30%.
The gain is the sale proceeds less the cost of acquiring the asset (section 39). Incidental costs of selling are also deductible (section 40). Keep your purchase agreement, payment receipts, and the invoices for selling costs.
An illustration only. Say your chargeable gain is ₦20 million after those deductions, and your other chargeable income is ₦2 million. Applying the bands above, the tax attributable to the gain comes to about ₦3.87 million, roughly 19% of the gain. The old flat rate would have produced ₦2 million. This ignores other reliefs, so your own figure will differ.
Two rules deserve attention before you agree a price:
- Instalment sales. Where the price is paid over more than 12 months, the gain is spread across the years in proportion to the instalments (section 42). Land and off-plan sales are often paid in stages, so check the schedule.
- The home exemption. Section 51 exempts gains on a dwelling-house and non-commercial adjoining land of up to one acre. It can be used only once in a lifetime. If part of the house is used for business, the consideration is apportioned.
The section is titled “Principal private residences”, but its text refers to a dwelling-house. Do not assume that a house you rent out, a shop, or an investment plot qualifies. Get advice first.
Some websites still quote the old 10% rate, or an older 7% to 24% PAYE band. EY, PwC, and Bloomberg Tax all describe the new progressive structure with a 25% top rate.
If You Buy: VAT, Stamp Duty and Mortgage Relief
Buyers have some good news. Land and completed buildings are exempt supplies under section 186, so you should not pay VAT on the price.
Capital gains tax falls on the seller, not you. Expect sellers to think about it when they set a price. Stamp duty usually falls on the purchaser, according to DLA Piper’s guide, so budget for it.
Financing can also help. Section 30 lists National Housing Fund contributions among eligible deductions. It also lists interest on loans for developing an owner-occupied residential house. Ask your adviser whether your loan fits that wording. If you are comparing routes, see our guides to the MREIF mortgage, the NHF ceiling, and how the CBN rate cut affects mortgage pricing.
Taxes are only part of the closing bill. Our breakdown of hidden fees in Nigerian real estate covers the rest.
Stamp Duty: What Is Settled and What Is Reported Differently
Some points are consistent across the summaries I reviewed:
- Sale agreements, conveyances, leases, assignments, and mortgages are chargeable instruments, and unstamped documents can be inadmissible as evidence
- Property transactions and leases below ₦10 million are exempt, according to EY and Estate Intel
- The purchaser or assignee usually bears the duty
The rates are reported differently. EY cites 1.5% on conveyances and tenure-based lease rates of 0.78% for under seven years and 3% for longer leases. One calculator site reports tiered conveyance rates of 1.5% to 2.5%. DLA Piper adds that, for deals between individuals, the state where the property sits collects the duty.
Confirm the rate and the office that stamps your document before you budget. Do not rely on a single website.
If You Rent: The New Rent Relief
Tenants get a new deduction. Section 30 allows 20% of annual rent paid, up to ₦500,000, provided you accurately declare the rent and other required information.
| Annual rent | Relief |
|---|---|
| ₦1,200,000 | ₦240,000 |
| ₦2,500,000 | ₦500,000 (the cap) |
| ₦3,000,000 | ₦500,000 (the cap) |
It reduces taxable income. It does not cut your tax by the same amount. Deductions must be claimed in writing (section 31), and the tax office can ask for proof (section 32). Keep your tenancy agreement and every rent receipt.
If your employer provides your housing, the taxable benefit is the annual rental value, capped at 20% of gross income (section 14).
Two Claims to Treat With Care
The luxury property tax. Several reports describe a 1.5% annual tax on high-end homes in Maitama and Asokoro in Abuja, and in Ikoyi and Banana Island in Lagos. Most call it a proposal. One February 2026 report says it forms part of the Act.
The gazetted Act’s list of sections contains no luxury property tax provision. Do not build it into your numbers unless your adviser confirms it.
The “25% tax” on building materials. In a public notice dated 16 February 2026, the Nigeria Revenue Service said the Act imposes no 25% tax on building materials, housing funds, or construction costs. Developers can ignore that claim.
A Practical Checklist for Abuja Owners and Buyers
- Landlords: keep tenancy agreements, rent receipts, and repair invoices, and declare rental income annually
- Sellers: collect your purchase documents and selling costs, and check whether section 51 applies and whether you have used it before
- Buyers: confirm the stamping of your documents and complete title perfection after payment
- Tenants: ask for receipts, since the rent relief depends on accurate declaration
- Everyone: tax compliance and land compliance are separate duties, so check your ground rent and C of O bills too, as our report on the Abuja ground rent crackdown explains
- High-value deals: get written advice from a tax professional before you sign
Conclusion: The Paperwork Now Carries the Tax
The Nigeria Tax Act 2025 makes property income and gains more visible and, for sellers, more expensive. It also gives tenants a relief and takes VAT off rent and property sales. The safest approach is to keep clean records, understand which exemption you are relying on, and confirm stamp duty before you sign.
At MiraEmma Properties, we help buyers, sellers, and landlords structure Abuja transactions with the paperwork in mind. If you are planning a sale, purchase, or lease, talk to our team before you commit.
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Frequently Asked Questions
When did the Nigeria Tax Act 2025 take effect? The President signed it on 26 June 2025, and it took effect on 1 January 2026. It replaced the Capital Gains Tax Act, Personal Income Tax Act, Companies Income Tax Act, VAT Act, and Stamp Duties Act.
What is the capital gains tax rate on property in 2026? For individuals, gains are added to total income and taxed at progressive rates of 0% to 25%. Companies pay the company rate, up to 30%. The old flat 10% rate no longer applies.
Do I pay capital gains tax when I sell my house in Abuja? Section 51 exempts gains on a dwelling-house and up to one acre of non-commercial adjoining land, once in a lifetime. Other property sales can be taxable. Get advice on whether your property qualifies.
Is rent subject to VAT in Nigeria? No. Residential and commercial rent are VAT-exempt, and land and completed buildings are exempt supplies, so buyers should not pay VAT on the price.
What is the rent relief for tenants? Tenants can deduct 20% of annual rent paid, up to ₦500,000, if they accurately declare the rent. The deduction must be claimed in writing, and the tax office can ask for proof.
How much is stamp duty on property in 2026? Sales, leases, assignments, and mortgages are chargeable, and transactions below ₦10 million are exempt. Sources report different rates, so confirm the rate and the stamping office for your document.
Is there a luxury property tax in Abuja? Reports describe a proposed 1.5% annual tax on high-end homes in Maitama and Asokoro. The gazetted Act’s list of sections has no such provision, so treat it as unconfirmed.
