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The Nigeria Revenue Service (NRS) has dismissed claims circulating online that the Nigeria Tax Act 2025 will impose a 25 per cent tax on building materials, construction funds and related transactions, describing the information as false and misleading.
In a public notice dated February 16, 2026, the Service clarified that the Nigeria Tax Act 2025 has already commenced and does not introduce any form of 25 per cent tax on building materials, construction costs, housing funds or associated financial transactions.
According to the NRS, the clarification became necessary following a recent video that falsely claimed the Act would only take effect in 2027 and would impose additional tax burdens on the housing and construction sector.
“The Nigeria Tax Act 2025 is already in effect, and it does not introduce any 25 per cent tax on building materials, construction costs, housing funds, or related transactions,” the Service stated.
The revenue authority explained that the Act was designed to ease, rather than increase, financial pressure on individuals and investors within the housing and construction value chain.
Contrary to the misinformation in circulation, the NRS said the purpose of the Nigeria Tax Act 2025 is to reduce the cost of housing, encourage investment in real estate and construction, and support broader economic participation across the country.
According to the Service, the law contains targeted provisions aimed at improving affordability and stimulating development throughout the housing sector.
Highlighting key provisions of the Act, the NRS noted that it introduces several reliefs and incentives to support housing and construction.
These include value-added tax, VAT exemptions on the sale and lease of eligible residential properties, including rent, as well as VAT exemptions for the supply of eligible building and construction inputs under specified conditions.
The Act also provides mortgage interest relief for owner-occupied homes, allowing mortgage interest deductions of up to ₦8 million to improve access to home ownership.
In addition, tax incentives are available for developers and institutional investors, including exemptions for qualifying Real Estate Investment Trusts (REITs) and other reliefs tied to eligible housing-related financing structures.
The NRS further disclosed that the Act includes withholding tax and VAT reliefs designed to lower compliance burdens and promote investment within the sector.
Addressing concerns about construction financing, the Service stressed that the Nigeria Tax Act 2025 does not impose any new tax burden on building materials or construction funds, nor does it introduce restrictions on how individuals finance housing projects or transfer funds for construction purposes.
“The Act does not impose any additional tax burden such as a ‘25 per cent tax’ on building materials or construction funds,” the statement said.
In its public advisory, the NRS urged Nigerians to ignore unverified claims and rely solely on information issued through official government channels.
“The Service urges members of the public to disregard misinformation and rely only on verified information issued through official government channels,” it stated.
The NRS reaffirmed its commitment to transparency, investment support and effective implementation of the Nigeria Tax Act 2025 in a way that strengthens the economy, improves housing affordability and safeguards public interest.
