Tax on property income in Nigeria
Taxation Researcher | November 01, 2020
Effective Tax Rate on Rental Income
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Nonresidents are taxed only on income earned in Nigeria. Married couples are taxed separately, joint filing and taxation is not allowed.
Non-resident individuals are generally subject to withholding taxes. Nonresidents can only claim the personal allowance of NGN5,000 (US$25) plus 20% of earned income deduction. No other deductions are available to nonresident individuals.
Gross rental income earned from leasing out real property is taxed at a final withholding rate of 10%.
The tax rate may be reduced to 7.5% for countries where Nigeria has concluded a double taxation treaty.
CAPITAL GAINS TAX
Capital gains tax is levied at a rate of 10% on the gains realized from the disposal of real property. Property acquisition costs and incidental costs in transferring property ownership (i.e. stamp duty, professional costs, and advertising) are deductible from the market value of the property.
Mansion tax is levied at a flat rate of 1% on residential properties located in the Federal Capital Territory Abuja. It is a luxury tax levied on properties worth at least NGN300 million (US$1,507,538).