Capital Gains Tax (CGT) is an important consideration when selling property in Nigeria. Many individuals and businesses overlook it—only to face penalties or legal issues later. At Faturoti Taiwo & Co., a leading accounting firm in Lagos, we help clients understand their CGT obligations and make informed financial decisions.
What is Capital Gains Tax (CGT)?
Capital Gains Tax is a tax on the profit (gain) made when you sell, transfer, or dispose of a capital asset. In Nigeria, CGT is governed by the Capital Gains Tax Act (CGTA) and is administered by the Federal Inland Revenue Service (FIRS).
CGT Rate in Nigeria
As of 2025, the applicable CGT rate in Nigeria is 10% on the net gain.
When Does CGT Apply to Property Sales?
CGT applies when you:
- Sell a piece of land or building
- Transfer ownership of real estate
- Gift a property (in some cases)
- Exchange property for another asset
How to Calculate CGT on Property Sales
The CGT is based on the net gain, calculated as:
Net Gain = Selling Price – (Purchase Price + Allowable Expenses)
Example:
If you bought a property for ₦30 million and sold it for ₦50 million, with ₦2 million spent on legal fees and improvements:
Net Gain = ₦50M – (₦30M + ₦2M) = ₦18M
CGT = 10% of ₦18M = ₦1.8M
Allowable Deductions
You can deduct the following expenses when calculating CGT:
- Legal and professional fees
- Cost of improvements (not maintenance)
- Valuation fees
- Agent commissions
Learn more from the FIRS CGT guide
Exemptions from CGT in Nigeria
Some property sales are exempt from CGT:
- Transfer between spouses or within family (under certain conditions)
- Sale of property used solely for owner-occupied residential purposes (if proceeds are reinvested within 12 months)
- Compensation for loss of office (subject to limits)
CGT Filing and Payment Process
- Calculate your net gains
- Complete the CGT computation
- Submit returns and pay to the FIRS within the required timeframe
Failure to file or underreporting can result in penalties.
How Faturoti Taiwo & Co. Can Help
We offer:
- Accurate CGT computations
- Advisory on property sales and tax efficiency
- Filing and compliance support with FIRS
- Strategic tax planning for real estate investments
👉 Contact us today to ensure your property transactions are tax-efficient and compliant.
Capital Gains Tax is more than just a financial obligation—it’s a critical part of real estate investment planning. With expert support from Faturoti Taiwo & Co., you can navigate CGT laws in Nigeria and maximize your returns legally and confidently.