Nigeria Exempts Land, Buildings and Rent from VAT

By Sofiat Adenekan -Abdul

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, says land, buildings and rent are now fully exempt from Value Added Tax (VAT) under the Nigeria Tax Act 2025.

Oyedele said the law, which has already taken effect, is aimed at reducing housing costs, encouraging real estate investment and easing the burden on tenants and small businesses.

He explained that buyers of land or completed buildings will no longer pay VAT, while both residential and commercial rent are now VAT-free.

He said the move is expected to lower property transaction costs and improve access to housing.
Oyedele also clarified that contractors can recover VAT paid on construction inputs, helping to reduce building costs.

He dismissed claims that the law introduces a 25 per cent tax on construction funds, bank balances or business expenses, describing such reports as false and misleading.

On construction contracts, he said Withholding Tax has been reduced to two per cent, while mortgage interest for owner-occupied homes is now tax-deductible. Landlords can also deduct expenses such as repairs and insurance before paying tax on rental income.

Tenants, he said, are entitled to rent relief of up to ₦500,000, capped at 20 per cent of annual rent. Lease agreements below ₦10 million are exempt from stamp duty.

Oyedele said the reforms are designed to make housing more affordable, stimulate growth in the property sector and protect workers and small businesses.