No 25% on building materials — NRS clarifies
Nigeria Revenue Service Addresses Misinformation on Tax Act
The Nigeria Revenue Service (NRS) has refuted circulating claims that the Nigeria Tax Act 2025 will impose a 25% tax on building materials, construction funds, and related transactions, calling the information inaccurate and misleading.
In a public notice released on February 16, 2026, the NRS clarified that the Act is already in effect and does not include any new taxes on construction-related expenses or housing funds. This clarification follows a recent video that suggested the Act would not take effect until 2027 and would increase tax obligations in the housing and construction sectors.
“The Nigeria Tax Act 2025 is already in effect, and it does not introduce any 25% tax on building materials, construction costs, housing funds, or related transactions,” the statement read. The NRS emphasized that the Act is intended to ease financial pressures on individuals and investors in the housing and construction industries.
Contrary to the misleading information, the NRS indicated that the primary goals of the Nigeria Tax Act 2025 are to reduce housing costs, promote investment in real estate, and enhance economic participation nationwide. The law includes provisions aimed at improving affordability and stimulating development in the housing sector.
Key features of the Act highlighted by the NRS include value-added tax (VAT) exemptions on the sale and lease of eligible residential properties and for certain building and construction inputs under specified conditions. Additionally, it offers mortgage interest relief for owner-occupied homes, allowing deductions of up to ₦8 million to facilitate access to homeownership.
Tax incentives are also available for developers and institutional investors, including exemptions for qualifying Real Estate Investment Trusts (REITs) and other reliefs tied to financing structures related to housing.
The NRS further explained that the Act incorporates withholding tax and VAT reliefs designed to minimize compliance burdens and encourage investment in the sector. Addressing concerns about construction financing, the NRS reiterated that the Nigeria Tax Act 2025 does not create any new tax burdens on building materials or construction funds, nor does it impose restrictions on how individuals finance housing projects or transfer funds for construction.
“The Act does not impose any additional tax burden such as a ‘25% tax’ on building materials or construction funds,” the statement affirmed.
In its advisory, the NRS urged the public to disregard unverified claims and rely exclusively on information disseminated through official government channels. The Service reaffirmed its commitment to transparency, investment support, and effective implementation of the Nigeria Tax Act 2025, aiming to strengthen the economy, improve housing affordability, and uphold the public interest.
