The Federal Government has revealed that challenges such as multiple taxation, inadequate property data, low compliance rate and inconsistent valuation practice are contributing to the inefficiencies in the real estate sector.
Chairman of the Federal Inland Revenue Service, Dr Zacch Adedeji, who spoke at its 55th yearly national conference of the Nigerian Institution of Estate and Surveyors (NIESV) in Abuja, said surmounting these challenges is crucial to optimise revenue generation and promote sustainable development in the real estate.
Speaking on “Tax Administration and the Real Estate Sector,” Adedeji emphasised that real estate in Nigeria has contributed significantly to the nation’s economy but faces multiple challenges. “It remains one of the significant sectors in the country’s economy and has gained noteworthy attention.”
“The Gross Domestic Product (GDP) report recently released by the National Bureau of Statistics (NBS), it has grown by 15.39 per cent in nominal terms in the fourth quarter of 2024, contributing N3.77 trillion to the GDP, equivalent to five per cent of it.
“The contributions of the real estate sector increased further, following the recent rebasing of the Nigerian economic data, as the sector now ranks as the third-largest sub-sector, “while the expansion of the real estate market is believed to be fuelled by rapid population growth.”
The FIRS boss emphasised that most of the challenges highlighted will soon become a thing of the past when the Tax Reform Bills are signed into law and implemented as some provisions of the bills are intended to address the long-standing tax-related challenges in the real estate sector.
“We are optimistic about city growth and urbanisation, industrialisation efforts, government policy interventions and improvements in the overall economic environment. With these, Nigeria’s population is expected to hit 400 million by 2050, and the demand for housing and luxury properties in major cities is expected to grow further,” he said.
NIESV President, Mr Victor Alonge, said the forum reflected a strategic push to position real estate as a driver of economic growth and social transformation in Nigeria and Africa in general.
He explained that they have addressed pressing and critical issues affecting the sector in Nigeria, including fragmented taxation, limited access to real estate financing, and the urgent need for institutional reforms to thrive maximally and enhance government revenue.
“More emphasis is on innovation, with a vibrant and sustainable development in view, as we highlight and articulate options that enhance a thriving real estate business, while adapting to the ever-changing global business with its strong, pervasive inter-connectivity of businesses, markets and people.”
NIESV’s Second Vice President, Dr Emmanuel Mark, in a lead paper, stressed that the real estate market has continued to grow, driven by the burgeoning population and rapid urbanisation, and brings various investment options, financing models, tax innovative financing models, tax incentives, and clear regulatory frameworks.
Mark stressed that real estate taxation is a crucial aspect of the industry, especially in Nigeria where infrastructure deficit is a significant challenge, property tax dynamics reengineering can help facilitate transformational agenda at the local level. “By leveraging real estate tax, government can generate revenue to fund development projects, improve infrastructure, and enhance quality of life of our citizens.
“Estate surveyors and valuers play a vital role in this ecosystem, providing accurate valuations, supporting tax reforms, and ensuring compliance. By harnessing their expertise and embracing technological innovations, we can transform the real estate landscape, drive economic growth, and promote prosperity,” he added.
