Mabel Akpan, Founder of Bella Ville Realty Ltd and a trusted advisor to property investors, has provided clarity on recent property tax regulations in Nigeria, emphasizing how the new laws affect both tenants and landlords. Her insights aim to dispel common misconceptions that government taxes automatically lead to higher rents.
According to Akpan, landlords are not taxed directly on the rent collected. Instead, taxation applies to their net income—what remains after deducting legitimate expenses such as maintenance, repairs, agency fees, security, cleaning, service charges, and property management costs. This means that even if a landlord collects significant rent, only the amount left after necessary expenditures is subject to tax. “Many landlords were already charging above the market rate before this law came into effect, so the idea that taxes automatically drive up rent is misleading,” Akpan explained.
Tenants also stand to benefit under the new framework through a Rent Relief Allowance, which allows individuals to deduct up to 20% of annual rent from their taxable income, capped at ₦500,000. For example, a tenant paying ₦400,000 in annual rent can deduct ₦80,000, while one paying ₦3,000,000 can deduct the capped amount of ₦500,000. Akpan notes that this provision formally recognizes rent as a financial burden and can reduce overall taxable income, a benefit many Nigerians may not yet be aware of.
While some landlords may still choose to increase rent, Akpan points out that such decisions are typically influenced by factors like location, demand, maintenance costs, inflation, or individual landlord discretion, rather than the tax law itself. She added that the legislation promotes greater transparency, reducing the likelihood of arbitrary rent hikes under the guise of government taxation.
Akpan encourages tenants and property investors to use this knowledge to make smarter decisions. Reviewing rent receipts, seeking clear breakdowns of maintenance and service fees, negotiating rental terms, and understanding how net income and expenses affect property value are all practical steps that can protect finances and guide investments.
“Understanding taxes and rental laws not only saves money but also equips Nigerians to make informed property and investment decisions,” Akpan said.
Bella Ville Realty continues to provide guidance on sustainable, informed property investment and rental practices, helping tenants and investors navigate Nigeria’s real estate landscape with confidence.