Nigerian real estate stakeholders have dismissed the removal of Value Added Tax (VAT) on land and rent as an ineffective solution to the nation’s persistent housing affordability crisis, pointing instead to escalating construction costs and systemic regulatory failures.
This position follows a clarification by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, who confirmed that VAT is already exempted on land, buildings, and rental payments under the current Nigeria Tax Act. Oyedele stated the broader tax reforms aim to lessen the burden of high rental costs. However, industry experts argue the fundamental drivers of rent inflation lie outside the tax code.
Across major urban centres including Abuja, Lagos, Kano, Enugu, and Port Harcourt, rental prices have surged dramatically. In Abuja, the annual cost for a one-bedroom apartment in areas like Dawaki and Kubwa has more than doubled, climbing from between N500,000 and N1,000,000 to a range of N1.5 million to N2 million. In numerous instances, annual rent now exceeds the total yearly income of a worker earning the national minimum wage of N70,000.
Aliyu Wamakko, former President of the Real Estate Developers Association of Nigeria, identified the soaring price of cement as the primary obstacle. He noted a 50kg bag now costs over N10,700, a figure driven by high demand from infrastructure projects and constrained supply. “As long as building materials are going up, there is no way you will get a reduction in prices,” Wamakko said, linking the engineering material’s cost directly to final housing and rent prices.
Hakeem Suleiman, President of the Association of Abuja Tenants, attributed the crisis to a lack of regulatory oversight and the absence of accessible mortgage financing. He criticised arbitrary rent increases by agents and landlords without government intervention and highlighted the critical need for functional mortgage systems to enable tenants to become homeowners. “Government regulators must wake up,” Suleiman stated.
The discussion occurs against a backdrop of a significant national housing deficit, estimated at over 14.9 million units, concentrated in major cities. While official inflation has declined, the cost of living remains elevated for most Nigerians. Stakeholders contend that meaningful relief in the rental market requires direct policy action on construction material costs and the establishment of a robust mortgage framework, rather than adjustments to a tax that is already not applied to land or rent.
