Property taxation in Nigeria has undergone significant reform with the enactment of the Nigeria Tax Act 2025 (NTA). The Act establishes a single, consolidated framework for taxing real estate transactions and investments, affecting landlords, tenants, developers, investors, estate managers, and real estate investment companies. Signed into law on 26 June 2025 and effective from 1 January 2026, the NTA repeals and consolidates several tax statutes, including the Capital Gains Tax Act, the Companies Income Tax Act, and the Value Added Tax Act. As a result, it provides greater clarity on the taxation of rental income, property disposals, VAT, stamp duties, rent relief, and Real Estate Investment Trusts (REITs). This article examines the key provisions of the Act and their practical implications for stakeholders in Nigeria’s real estate sector.

Deadlines for Filing Tax Returns in Nigeria
Under existing Nigerian tax laws, particularly the Companies Income Tax Act (CITA) and other relevant legislation, the deadlines for filing tax returns depend on the type of tax and the nature of the business. 

As a result, landlords, tenants, developers, investors, estate managers, and real estate investment companies must understand how the new framework affects rental income, property disposals, VAT, stamp duties, rent relief, and REIT taxation. This article explains the key provisions and their practical implications for the real estate sector.

1. Chargeable Income under Section 4

Section 4 establishes the types of income, profits, and gains that are chargeable to tax in Nigeria. Consequently, it serves as the foundation for the Act’s real estate taxation provisions.

Specifically, Section 4(1)(b) includes royalties, fees, rents, and interest arising from rights granted for the use, occupation, or exploitation of property. In addition, Section 4(1)(i) brings profits or gains from the disposal of property or fixed assets within the tax net, thereby laying the basis for the capital gains rules discussed later.

Practical Implications

• Landlords must include rental income when calculating their annual taxable income, whether they operate as individuals or companies.
• Likewise, investors should maintain accurate records of rental receipts and allowable expenses because deductions are only permitted where adequate documentation exists.
• Furthermore, ancillary property income—such as service charges or letting fees incorporated into lease arrangements—may also be taxable depending on how the transaction is structured.

2. VAT Treatment of Real Estate Transactions

Although the NTA retains Value Added Tax on taxable goods and services, it expressly exempts certain real estate transactions.

Under Section 186, land, buildings, and interests in land or buildings are exempt supplies. Accordingly, the sale of land or completed buildings does not attract VAT. Similarly, landlords should not charge VAT on residential or commercial rent.

However, the exemption applies only to the transfer or letting of the property itself. By contrast, related professional services remain taxable where they satisfy the general VAT requirements under Chapter Six. These services include estate agency commissions, property management fees, legal fees, consultancy services, and construction-related services.

Practical Implications

• Sale agreements and lease agreements for land or buildings should exclude VAT on the property component.
• Nevertheless, developers should clearly separate exempt property transactions from taxable professional services to ensure accurate VAT accounting.
• Similarly, businesses providing real estate-related services must continue to register for, charge, and remit VAT where applicable.

3. Capital Gains Tax on Property Disposals

The standalone Capital Gains Tax Act has been repealed and incorporated into the NTA through Sections 33 to 46.

Section 34 defines chargeable assets broadly to include property, shares, rights, options, debts, and digital or virtual assets located both within and outside Nigeria. Furthermore, Section 33 confirms that gains realised during a year of assessment are taxable.

The most significant reform concerns the method of taxation. Instead of applying a separate flat capital gains tax, chargeable gains are now included within a taxpayer’s total income or total profits.

For companies, Section 27(1) includes chargeable gains in total profits, which are taxed under Section 56 at 0% for qualifying small companies and 30% for other companies. Likewise, Section 28(2)(a)(v) includes chargeable gains in an individual’s taxable income, making those gains subject to the progressive personal income tax rates ranging from 0% to 25%.

Consequently, gains arising from the disposal of property by large companies may now be taxed at the applicable corporate income tax rate rather than the previous standalone capital gains tax rate of 10%.

Importantly, the Act preserves significant relief for individual homeowners. Section 51 exempts gains arising from the disposal of a dwelling house, together with adjoining land of up to one acre, provided the property is not used for commercial purposes. However, this exemption may only be claimed once during an individual’s lifetime.

Additionally, Section 37 exempts gains resulting from compulsory land acquisition where the owner neither acquired the land in anticipation of the acquisition nor actively marketed it to the acquiring authority.

Practical Implications

• Developers and investors should retain comprehensive records of acquisition costs, improvement costs, and disposal expenses because these figures determine the taxable gain.
• Meanwhile, individuals disposing of their principal residence should determine whether they qualify for the lifetime exemption under Section 51.

4. Rent Relief for Individual Taxpayers

The NTA replaces the former Consolidated Relief Allowance with several targeted deductions, including rent relief.

Under Section 30, an individual’s chargeable income equals total income less eligible deductions. One such deduction is rent relief under Section 30(2)(a)(vi), which permits a deduction equal to 20% of annual rent paid, subject to a maximum of ₦500,000, provided accurate information is supplied to the relevant tax authority.

Practical Implications

• For example, an individual paying ₦1,000,000 in annual rent may claim a deduction of ₦200,000, since this amount falls below the statutory cap.
• In addition, tenants should retain tenancy agreements and proof of payment because supporting evidence may be requested.
• Under Section 32, the relevant tax authority may reject or reduce any unsupported claim.

5. Real Estate Investment Companies (REITs)

The NTA provides two important tax measures for Real Estate Investment Companies (REITs).

First, Section 20(1)(k) allows an SEC-approved REIT to deduct dividends or mandatory distributions paid to shareholders when calculating taxable profits. Consequently, profits distributed to investors are generally not taxed twice at the company level.

Second, Section 9(2)(d) provides an exception to the anti-avoidance rule contained in Section 9(1). Under this exception, distributions made by qualifying REITs from rental income and dividend income received on behalf of shareholders are excluded from the deemed profit rule.

Although this provision does not create a general tax exemption, it offers greater certainty than the previous regime.

Practical Implications

• REITs should maintain valid SEC approval to qualify for available deductions.
• Furthermore, advisers should distinguish carefully between the Section 20 deduction and the Section 9 anti-avoidance exception when advising investors.
• Overall, the new framework offers greater certainty than the previous legislation.

6. Stamp Duties on Property Instruments

Chapter Five preserves stamp duty obligations for property-related instruments.

Specifically, Section 131 applies to conveyances on sale, while Section 135 governs leases. In addition, Section 126 requires chargeable instruments to be stamped. Under Section 127, an unstamped instrument is inadmissible in evidence, creating significant legal risks during disputes.

Reports on the Act indicate that leases with an annual value below ₦10,000,000, together with certain qualifying property transactions below the same threshold, may benefit from stamp duty exemptions. Nevertheless, practitioners should verify these thresholds against the certified legislation before relying on them.

Practical Implications

• Property sale agreements, deeds of assignment, mortgages, and leases should be stamped promptly.
• Likewise, conveyancing practitioners should incorporate stamp duty compliance into every transaction timeline.
• Before advising clients on available exemptions, practitioners should verify the applicable thresholds directly from the Act or official guidance.

Conclusion

The Nigeria Tax Act 2025 introduces a more coherent framework for taxing real estate by consolidating provisions relating to rental income, VAT, property disposals, rent relief, REITs, and stamp duties into a single statute.

As a result, landlords, tenants, developers, investors, and property owners benefit from greater certainty regarding their tax obligations. At the same time, compliance has become increasingly important because many reliefs depend on accurate documentation and proper transaction structuring.

Professional tax advice remains essential for anyone involved in property transactions or investment structures. Careful planning will help taxpayers comply with the Act while maximising the available reliefs and exemptions.

For tailored guidance on how the Nigeria Tax Act 2025 affects your real estate transactions, tax position, or REIT structure, contact SOW Professional Services Ltd. Our tax advisory and regulatory compliance team is available to help you navigate the practical implications of the new legislation with confidence.