Industry stakeholders have argued that removing Value Added Tax (VAT) will not significantly address the rising cost of rent in Nigeria, insisting that deeper structural issues are responsible for the persistent increase in housing prices.
According to property developers, estate managers, and housing policy analysts, rental costs are largely driven by factors such as inflation, high construction material prices, land acquisition expenses, infrastructure deficits, and the high cost of financing. They maintain that while tax adjustments may offer marginal relief in some sectors, rent pricing is influenced more by supply and demand dynamics than by VAT alone.
Real estate professionals explained that in many urban centers, demand for housing far exceeds supply, particularly in major commercial cities. This imbalance has created a landlord-driven market, where property owners set prices based on scarcity and prevailing economic conditions rather than tax considerations.
Developers also pointed to the rising cost of building materials, including cement, steel, and finishing products, which have surged due to exchange rate volatility and import dependence. In addition, high interest rates on loans used for property development have increased the overall cost of delivering housing projects, which is ultimately passed on to tenants.
Some stakeholders further noted that infrastructure challenges such as unreliable electricity, poor road networks, and limited water supply force developers to provide private alternatives like generators and boreholes. These additional costs are factored into rental pricing.
Housing advocates argue that meaningful solutions should focus on expanding affordable housing supply, improving access to low-interest mortgage financing, reforming land administration systems, and stabilizing the broader economy. They emphasize that comprehensive policy reforms, rather than isolated tax adjustments, are necessary to ease the burden on renters.
While acknowledging that tax reforms can be beneficial in certain contexts, stakeholders insist that tackling the high cost of rent requires coordinated economic, fiscal, and housing sector interventions designed to increase supply and reduce systemic cost pressures.