From Victor Osula, Abuja
The Nigeria Revenue Service (NRS) has clarified that the Nigeria Tax Act 2025 does not impose a 25 per cent tax on building materials, construction funds, or related transactions, dismissing circulating claims as false and misleading.
This clarification comes amid viral social media claims that had sparked concerns among homeowners, developers, and construction industry stakeholders.
In a public notice released on Monday, February 16, the Revenue Service stated that the Tax Act 2025 is already in effect and does not introduce any new levies on building materials, construction costs, housing funds, or associated transactions. It also corrected claims that the law would only take effect in 2027.
The service emphasized that the primary purpose of the Nigeria Tax Act 2025 is to reduce housing costs, encourage investment in the real estate and construction sectors, and promote broader economic participation.
“The Act includes targeted provisions aimed at improving affordability and stimulating development across the housing value chain,” it noted.
Key incentives under the Act include VAT exemptions on the sale and lease of eligible residential properties, VAT exemptions on specified building and construction inputs, mortgage interest relief for owner-occupied homes with deductions of up to ₦8 million, and tax incentives for developers and institutional investors, including qualifying Real Estate Investment Trusts (REITs).
Additionally, withholding tax and VAT reliefs are designed to lower compliance burdens and encourage investment in the sector.
Reiterating that there is no new “25% tax” on construction, the NRS urged the public to disregard misinformation and rely solely on verified information issued through official government channels.
The Service affirmed its commitment to transparency, supporting investment, and implementing the Nigeria Tax Act 2025 in a manner that strengthens the economy, improves housing affordability, and protects public interest.
“The Act does not introduce any additional tax burden or restrict how individuals finance housing projects or transfer funds for construction purposes,” the NRS stated, reassuring citizens and investors alike that the legislation is pro-development and investor-friendly.
