Stakeholders in Nigeria’s real estate sector have argued that removing Value Added Tax (VAT) on land and rent will not resolve the persistent rise in housing costs across the country.
Their position follows a clarification by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, who explained that VAT is already exempted on land, buildings and rent under the Nigeria Tax Act currently being implemented. The clarification came amid reports alleging that the Act had introduced a 25 percent tax on building materials and related items. Oyedele maintained that the tax reforms are intended to ease the burden of high rental costs on Nigerians.
However, property experts insist that the real drivers of rising rents lie elsewhere.
Across major cities including Abuja, Lagos, Kano, Enugu and Port Harcourt, rental prices have surged sharply. In Abuja, for example, the annual rent for a one-bedroom apartment has increased by more than 100 percent, climbing to between N1.5 million and N2 million from previous rates of N500,000 to N1,000,000 in areas such as Dawaki, Jabi, Jahi, Kubwa, Dutse and Nyanya. Similar trends have been recorded in other urban centres.
In many cases, annual rent now exceeds the yearly income of a worker earning Nigeria’s N70,000 minimum wage.
Former President of the Real Estate Developers Association of Nigeria, Aliyu Wamakko, and President of the Association of Abuja Tenants, Hakeem Suleiman, said attention should shift from VAT exemptions to tackling the soaring cost of building materials, particularly cement.
Wamakko argued that cement remains the primary input in housing construction and its rising price has a direct impact on property costs. According to him, cement now sells for over N10,700 per 50-kilogram bag, with factory prices around N10,500. He noted that increased infrastructure projects, such as road construction using cement, have further driven up demand, thereby pushing prices higher.
He explained that when demand rises and supply remains limited, costs inevitably increase, affecting everything linked to cement — including house prices and rents. He also highlighted Nigeria’s housing deficit, estimated at over 14.9 million units and concentrated largely in Abuja, Lagos, Kano and Port Harcourt, stressing that without a reduction in building material costs, rental prices are unlikely to decline.
On his part, Suleiman attributed rising rents to weak regulatory oversight and the lack of accessible mortgage systems for ordinary Nigerians. He said arbitrary rent increases by agents, lawyers and caretakers, often without improvements to properties, have worsened the situation.
He called for stronger government regulation and the establishment of effective mortgage systems to enable tenants transition into home ownership, arguing that without structural reforms, housing affordability will remain out of reach for many Nigerians.
Although inflation has moderated in recent months, the cost of living remains high, and housing continues to place significant financial pressure on households nationwide.
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