The Federal Government has said that the Tax Reforms Bill now before the National Assembly will exempt real estate transactions from Value Added Tax (VAT) if enacted, as part of the fiscal measures to boost the real estate sector and by implication close the housing deficit in the country.
Speaking at a forum organized by the Council of Registered Builders of Nigeria (CORBON) and the Housing Development Advocacy Network (HDAN), the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, highlighted the bill’s transformative potential for the housing sector and its contribution to the Gross Domestic Product (GDP).
Specifically he explained that “there will be no VAT on lands, the sale of real estate, and rent is exempted from VAT. Some of these have been areas of controversy in the past”, listing other benefits of the draft legislation as including the exemption of stamp duties for rents below N10 million per month; Capital gains tax exemptions on the sale of dwelling houses.
Oyedele clarified that these provisions were intended to make housing more affordable and accessible to Nigerians, including the low and middle-income earners, while also addressing long-standing tax-related challenges in the real estate sector.
According to him, the draft bill also includes priority sector incentives for building materials’ production, particularly non-metallic products, to enhance local manufacturing capacity, adding that the reforms will extend to land transactions, including titling and the harmonization of property taxes, to streamline processes and reduce costs.
He expatiated: “The Tax Reform Bill will improve the affordability of housing. It will provide relief for people paying rent by removing a significant portion of the tax burden.
“The essence is to make life better for everyone and stimulate economic activities in the building and construction sectors, and by extension, the entire economy”, the tax expert added.
On the lingering misconceptions on the tax reforms in the public, Oyedele debunked them and advised Nigerians to seek accurate information about the reforms, and decried the misinformation being spread about the reforms in the public space, particularly on social media platforms.
He stressed: “This bill has many benefits, but it is being misconceived by some people. It’s important to understand the facts.”
In his contribution during the tax reforms, Minister of Housing and Urban Development, Ahmed Dangiwa, describing the tax reform bill as a game-changer in the housing sector, especially for construction firms and contractors.
The minister, who was represented by Director of Public Building, Temitope Gbemi, said that the ministry had aligned its housing policies with the fiscal reforms with a view to ensuring equity and investor protection in real estate and housing investments in the country.
