VAT Removal Won’t Cut Soaring Rents, Real Estate Experts Warn
By FIDELUS ZWANSON
Rising Rents, Growing Frustration
AMID growing public anger over escalating housing costs, real estate stakeholders have warned that removing VAT on land and rent will not deliver meaningful relief to tenants.
Although the Federal Government has exempted VAT on land, buildings and rent under the current tax framework, property professionals argue that rental pricing is being driven by deeper structural factors.
In cities such as Abuja, Lagos and Port Harcourt, rental rates have more than doubled in some districts. In Abuja’s satellite towns, one-bedroom apartments now command up to ₦2 million annually — a sharp increase from previous rates below ₦1 million.
For low- and middle-income earners, the surge has significantly widened household budget deficits.
Cost Pressures in Construction
Aliyu Wamakko, former President of the Real Estate Developers Association of Nigeria, maintained that the spike in rent is closely tied to escalating construction costs.
“Cement prices have crossed ₦10,700 per bag,” he said, noting that demand from road construction projects further constrains supply.
According to him, Nigeria’s housing deficit — estimated at nearly 15 million units — ensures that demand consistently outstrips supply, sustaining upward pressure on rental values.
“Reducing VAT does not solve the core issue,” he said. “If input costs remain high, rents will follow.”
Weak Oversight and Limited Access to Mortgages
Hakeem Suleiman, President of the Association of Abuja Tenants, said unregulated rent increments worsen the situation.
“Some landlords and agents raise rent arbitrarily without adding value,” he said. “There is inadequate mortgage access for ordinary Nigerians.”
He argued that the absence of affordable, long-term financing traps many households in a rental cycle, intensifying demand and enabling landlords to dictate prices.
Inflation Down, Housing Costs Up
While the National Bureau of Statistics reported inflation at 15.10 per cent in January 2026, stakeholders note that housing costs remain stubbornly high, reflecting supply-side constraints rather than tax burdens.
Analysts conclude that sustainable rent moderation will require coordinated action: lowering construction input costs, improving housing supply, strengthening regulatory oversight and expanding mortgage access.
Until these structural issues are addressed, VAT removal alone is unlikely to bring meaningful relief to Nigeria’s struggling tenants.
