Nigeria’s new property tax on luxury homes has raised concerns among experts who fear it will slow sales and push rentals higher.
The Federal Government has introduced a new property tax policy for 2025, targeting homes valued above ₦150 million in Lagos, Abuja, and Port Harcourt. Such properties will attract an annual levy of 1.5 percent of their market value.
According to the Finance Ministry, the new tax is designed to generate funds for affordable housing projects and urban renewal. However, experts believe the measure could hurt the luxury property market. They argue that “sellers may drop prices to avoid higher valuations,” while others predict an increase in long-term rentals as owners attempt to offset costs.
Developers are also expected to shift focus to mid-tier housing outside the tax bracket, which could boost demand in that segment but weaken investor confidence in luxury real estate.
The new policy contrasts with the Tax Reform framework, under which real estate transactions are expected to be exempt from VAT to reduce housing costs, according to Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms committee.