The Nigerian real estate market is about to undergo a significant transformation. If you’re considering an investment, now is the time to act. The Nigeria Tax Reform Bill 2024 introduces new taxes, levies, and regulations that will increase property transaction costs.
To help you make an informed decision, this post explores how the new tax bill affects real estate investors and why early investment can save you money.
1. Capital Gains Tax on Property Sales
One of the most notable changes in the bill is the expansion of Capital Gains Tax (CGT) to all real estate transactions.
- If you sell a property, your profits will be taxed (Sec 33 & 34).
- Inherited or gifted properties could also be taxed upon resale.
- Charitable organizations are exempt, but individual investors are not.
So, what does this mean for you? If you plan to flip or sell property in the near future, investing now allows you to maximize appreciation before CGT increases your transaction costs. Delaying your decision could mean losing more money to taxes.
2. Higher Stamp Duties on Property Transfers
Thinking of buying or selling property? Prepare for higher stamp duties and stricter enforcement.
- Stamp duty is now mandatory for all property transactions (Sec 123-126).
- Failure to stamp documents within 30 days makes them invalid in court.
- Land swaps, property exchanges, and partitioning now attract duties (Sec 132).
This new regulation means that delays in documentation could result in costly legal complications. By investing before the law takes full effect, you can avoid additional expenses and ensure your transactions remain valid.
3. Leases & Rentals to Attract More Taxes
For those who own rental properties or lease real estate, the new tax policies may impact your earnings.
- Leases above ₦10 million will now attract stamp duties (Sec 133).
- Employer-provided housing will be considered taxable income (Sec 18).
These changes will directly affect landlords and property managers. As a result, they may adjust rental prices to accommodate the new tax obligations. This means higher rent for tenants and more taxation on rental income. If you plan to invest in rental properties, doing so before tax hikes take effect is a strategic move.
4. Government Acquisition of Land: What It Means for You
The government’s new approach to compulsory land acquisition could affect landowners and investors alike.
- If your land is forcibly acquired by the government, you won’t pay Capital Gains Tax (Sec 37).
- However, reclaiming full market value could be challenging if the acquisition occurs suddenly.
If you’re considering buying land for future projects, it is crucial to act fast before any policy shifts limit land availability.
5. VAT on Property Sales & Valuations
Among all the upcoming tax reforms, VAT changes on property transactions could be the most impactful.
- VAT will now apply to property sales and leases (Sec 142-144).
- Property appraisals and valuations will also be taxed (Sec 137).
These changes will drive up property prices over time. Investors who acquire real estate now will save significantly compared to those who wait. The cost of hesitation could be substantial.
Conclusion: Invest Now or Pay More Later
Real estate has always been a safe and profitable investment. However, with the Nigeria Tax Reform Bill 2024, property transactions will become more expensive.
📌 Secure your investment before taxes increase.
📌 Close deals early to avoid additional VAT and stamp duties.
📌 Take advantage of rental opportunities before tax hikes affect yields.
Waiting too long means paying more. The best time to invest was yesterday. The second-best time is NOW.
Are you ready to secure your real estate investment? Let’s discuss your strategy today!
