By Grace Alegba
Lagos, Dec. 30, 2025 – A landmark shift in Nigeria’s fiscal policy is poised to reshape the nation’s housing landscape. Mr. Victor Alonge, President of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), has declared that the new tax reforms, effective January 1, 2026, will deliver a significant, positive jolt to the real estate sector, unlocking investment and expanding home ownership.
Alonge’s analysis was delivered during a press briefing for the signing of a strategic Memorandum of Understanding between QShelter Ltd. and M.I. Okoro and Associates. The partnership aims to jointly market housing units under the Federal Government’s Renewed Hope Housing Schemes in key areas: Abuja, Kano, and the Lagos Coastal Road corridor. This deal itself is a signal of growing confidence in the market’s trajectory.
Decoding the Reforms: A Multi-Pronged Stimulus
Alonge framed the reforms not as mere adjustments, but as a strategic model adopted from advanced economies to stimulate growth from the ground up. The core of the positive impact lies in its targeted relief across the construction value chain.
1. Empowering the Informal Sector & Small Businesses: A critical move is the exemption of several small-scale businesses within the construction value chain from certain taxes. Furthermore, Value Added Tax (VAT) has been removed for the informal segment of the construction industry. This is a profound change. It reduces the cost burden on the vast network of artisans, small material suppliers, and local contractors who form the backbone of housing delivery, potentially lowering build costs and increasing their operational viability.
2. Incentives for Large Firms & Local Production: While large construction firms will still pay VAT on some materials, Alonge clarified that the law includes provisions to offset these costs through other incentives. These are likely tied to encouraging local production of building materials, a move that could reduce import dependency, create jobs, and insulate the sector from foreign exchange volatility over the long term.
3. The Game-Changer for Mortgage Financing: Perhaps the most direct benefit for aspiring homeowners was highlighted by Mr. Adegbenga Alamu, Chief Operating Officer of QShelter Ltd. “The interest paid on a mortgage is now deductible before tax computation, making borrowing cheaper for home buyers,” he stated. This fundamentally alters the affordability calculus. For example, if a buyer is in a 20% tax bracket, a portion of their mortgage interest expense effectively receives a 20% subsidy from the government. Alamu, drawing from a banking perspective, underscored the shift: “Debt is cheaper and better with the new law.” This incentive is designed to strengthen mortgage origination and improve access to formal housing finance.
Broader Economic Impact and Disposable Income
Alonge positioned the law as one of the most beneficial for Nigerian workers in recent times, citing broad tax exemptions for low-income earners due to a significantly higher income threshold. His estimate that about 90% of workers would no longer pay personal income taxes is staggering. The resultant increase in disposable income for millions of Nigerians could create a larger pool of potential savers and home buyers, stimulating demand-side growth in the housing market.
Synthesis: A Holistic Push for Housing
In essence, the new law attacks the housing deficit from three angles simultaneously: reducing construction costs (via informal sector VAT removal), stimulating supply-side investment (via incentives for large firms and local production), and boosting effective demand (via mortgage interest deductibility and higher take-home pay). The cumulative savings and incentives across this chain, as Alonge concluded, are expected to “strengthen mortgage financing and improve access to housing for Nigerians.”
While the success of this ambitious reform will depend on effective implementation and complementary policies, the NIESV’s endorsement signals a strong belief within a key professional body that the 2026 tax regime marks a pivotal, positive turning point for Nigerian real estate and the dream of widespread home ownership.
(NAN) (www.nannews.ng)
GA/KTO
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Edited by Kamal Tayo Oropo
