Nigeria Property Tax Guide 2026

Overview — Property Taxation in Nigeria

Property taxation in Nigeria is shared between the federal government (CGT, stamp duties, VAT) and state governments (ground rent, tenement rates, development levies). There is no annual property tax based on market value at the federal level, but states impose tenement rates and ground rents. Property transfers trigger stamp duty and potential CGT liability. The system is complex and varies by state, with Lagos State having the most developed property tax administration.

Capital Gains Tax on Property — 10%

Capital gains tax (CGT) at a flat rate of 10% applies to the gain realized on the disposal of real estate, shares, and other assets. The gain is calculated as the difference between the sale proceeds and the acquisition cost (plus incidental costs of acquisition and disposal). Indexation is not available. Gains on the sale of a principal private residence are exempt from CGT if certain conditions are met. Rollover relief is available for agricultural land and certain business assets. The gain must be reported within three months of disposal.

Stamp Duties on Property Transfers

Stamp duties are payable on property transfer documents. The rates vary by state: typically 2% of the property value for assignments of land and buildings in Lagos State (shared between the state government and the federal government). In other states, rates range from 1% to 3%. The first NGN 250,000 of consideration is exempt from stamp duty. Stamp duties are paid at the land registry when registering the transfer. Failure to pay stamp duty renders the document inadmissible as evidence in court.

Ground Rent and Tenement Rates

Annual ground rent is payable to the state government for land held under a Certificate of Occupancy (C of O). Rates vary by state and location, typically ranging from NGN 10,000 to NGN 100,000+ per year for residential property. Tenement rates are state-level property taxes imposed on the rental value of buildings. In Lagos State, tenement rates range from 0.35% to 0.75% of annual rental value, depending on the property's location and type. Payment is typically annual or biennial.

VAT on Commercial Rentals

Rent on commercial property (not residential) is subject to VAT at 7.5%. The landlord must charge and remit VAT on rent invoices. Residential property rent is exempt from VAT. Withholding tax (WHT) at 10% (for corporate tenants) or 15% (for individuals) is also deducted from rent payments and remitted to FIRS. This creates a combined tax burden on commercial rental income: WHT (advance tax) plus VAT.

Development Levies

State and local governments impose various development levies on property owners and developers. These include: building plan approval fees, development permit charges, signage and advertisement levies, and neighborhood improvement charges. The amounts vary significantly by state and local government area. In some states, these levies can represent a significant cost for property development and ownership.

FAQs

Is there an annual property tax in Nigeria?

There is no federal annual property tax based on market value. However, states impose tenement rates and ground rents, which are effectively annual property charges.

Is the sale of a primary residence subject to CGT?

No. Gains on the sale of a principal private residence are exempt from CGT, provided the property was used as the owner's main home throughout the period of ownership.

What is the CGT rate for companies?

Companies pay the same 10% CGT rate on capital gains, not the 30% corporate income tax rate. However, companies trading in real estate (dealers) are taxed at ordinary CIT rates.

Disclaimer

This guide provides general information about property taxation in Nigeria for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Nigerian tax advisor or your state IRS directly for advice specific to your situation. InvestmentKit does not provide tax advice.