Residential property just scored a tax break. Under the Nigeria Tax Act, 2025, all residential and commercial real estate sales and leases will be exempt from VAT starting 1 January 2026, a move that aims to jump-start housing finance and cut project costs, The Guardian reports.
The Big Picture
Nigeria is rolling out its most ambitious tax reboot in decades. While policymakers chase additional revenue, the reform package also promises carrots,like the VAT holiday for property,to spur investment and tidy up a famously tangled tax web.
The Details
• The Act layers in a new “top-up tax” for multinational groups, tighter Controlled Foreign Company rules, and clearer capital-gains definitions.
• Developers that rely on offshore Special Purpose Vehicles will see closer Federal Inland Revenue Service (FIRS) scrutiny, possibly raising financing costs.
• Analysts told the Guardian that real-estate benefits hinge on whether “government uses tax proceeds to enhance mortgage financing and land administration.”
Why It Matters
The reaction was swift. Tax advisers say the VAT exemption could shave 7.5 % off project budgets, but only if enforcement is consistent. “Execution, consistency, and engagement will determine success,” one consultant noted in the Guardian piece.
Around the Tax World
• ChatGPT gets pricier. OpenAI will tack on 7.5 % VAT to Nigerian subscriptions from 1 Nov 2025, complying with Section 10 of the VAT Act (Techpoint).
• FIRS goes friendly (and digital). The agency’s Coordinating Director, Mathew Gbonjubola, said the reform “eliminates taxes on capital and investment” and streamlines withholding rules at an American Business Council event (NAN).
• Diaspora relief. Nigerians abroad won’t need a Tax Identification Number,or pay tax on foreign income,unless they earn Nigerian-source income, committee chair Taiwo Oyedele clarified in a Q&A (The Sun).
• One bill, one payment. Ongoing revenue harmonisation in the Federal Capital Territory aims to curb double taxation and cut red tape, according to a tax expert (ThisDay).
Tax Stat of the Day
₦3.69 trn , Oil tax revenue collected in H1 2025, up 41.7 % year-on-year thanks to higher crude output and better compliance (The PUNCH).
Looking Ahead
All eyes turn to 1 January 2026, when the Tax Act kicks in. Expect a flurry of FIRS guidance and plenty of midnight oil from finance teams,before the new rules hit the books.
Prepared by MyTax - mytax.com.ng