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, insisting that the core drivers of high rent lie elsewhere.
The position follows a clarification by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, who stated that VAT is already exempted on land, buildings, and rent under the Nigeria Tax Act currently being implemented. His clarification came amid reports alleging that the Act introduced a 25 percent tax on building materials and related items. Oyedele maintained that the ongoing tax reforms are aimed at easing the burden of high rental costs on Nigerians.
However, real estate practitioners disagree, noting that rental prices continue to soar despite existing VAT exemptions. Across major cities such as Abuja, Lagos, Kano, Enugu, and Port Harcourt, rent has risen sharply, fueling public frustration. In Abuja, for example, the annual rent for a one-bedroom apartment has increased by over 100 percent, rising to between N1.5 million and N2 million from previous rates of N500,000 to N1 million in areas including Dawaki, Jabi, Jahi, Kubwa, Dutse, and Nyanya. Similar trends have been recorded in other urban centers, with rent in many cases exceeding the annual income of workers earning the N70,000 minimum wage.
Speaking exclusively, former President of the Real Estate Developers Association of Nigeria, Aliyu Wamakko, said the rising cost of building materials, especially cement, is the primary factor driving up rent. He noted that cement prices now exceed N10,700 per 50kg bag, making housing development increasingly expensive. According to him, Nigeria’s estimated 14.9 million housing deficit, concentrated in cities like Abuja, Lagos, Kano, and Port Harcourt, will persist unless material costs are reduced.
Similarly, President of the Association of Abuja Tenants, Hakeem Suleiman, blamed weak regulation and the absence of accessible mortgage systems. He said arbitrary rent increases, poor oversight, and lack of affordable homeownership options have worsened tenants’ hardship, calling for urgent government intervention.
Despite inflation easing to 15.10 percent in January 2026, the cost of living, stakeholders say, remains unacceptably high for most Nigerians.
