Capital Gains Tax in Nigeria: What Is Taxed on Property or Shares?

Selling land, a building, company shares, digital assets, or another valuable asset in Nigeria can create a taxable capital gain. The calculation generally starts with the difference between the disposal proceeds and the allowable cost of acquiring and disposing of the asset.

The rules changed significantly with the Nigeria Tax Act, 2025. From the commencement of the new law, capital gains are no longer governed by the former flat 10% Capital Gains Tax regime. Instead, chargeable gains are brought into the broader income-tax framework, with the applicable rate depending largely on whether the taxpayer is an individual or a company. The Nigeria Revenue Service explains the change as a move away from the former flat 10% rate.

What Is Capital Gains Tax?

Capital gains tax is tax arising from a gain made when a chargeable asset is disposed of for more than its allowable cost. A disposal can include a sale, transfer, exchange, gift in certain circumstances, or another transaction that effectively transfers ownership or beneficial rights.

Under the former Capital Gains Tax Act, Cap. C1, Laws of the Federation of Nigeria 2004, Section 3 treated different forms of property as chargeable assets, subject to statutory exemptions. Section 11 provided that the gain was broadly determined by comparing the consideration received with allowable costs and expenditure.

The Nigeria Tax Act, 2025 repeals the former Capital Gains Tax Act and places capital-gains provisions within the new tax framework. Section 33 provides that gains accruing to a person in a year of assessment are chargeable to tax in accordance with the Act. Section 34 defines chargeable assets broadly to include property, shares, rights, debts, digital assets, intangible property, and foreign currencies.

This means that the tax question is not simply whether an asset was sold. The relevant questions are:

• What asset was disposed of?
• Who disposed of it: an individual, company, trust, or non-resident?
• What was the disposal value?
• Which acquisition and disposal costs are allowable?
• Does a specific exemption or relief apply?
• What tax rate applies under the taxpayer’s status?

2026 Capital Gains Tax Rates

The former Capital Gains Tax Act imposed a flat 10% rate on chargeable gains. The Nigeria Tax Act, 2025 changes this approach.

For individuals, chargeable gains are generally taxed using the applicable personal income-tax rates under Section 58 of the Act. The rates range from 0% to 25%, depending on the individual’s taxable income after applying the relevant deductions and reliefs.

For companies, chargeable gains generally form part of taxable profits. Section 56 provides a 0% company-income-tax rate for qualifying small companies and a 30% rate for other companies from commencement of the Act. The classification depends on the statutory conditions, including the company’s gross turnover and fixed assets.

The rate cannot be applied accurately without identifying the taxpayer and calculating the chargeable gain. For example, a company’s gain from selling an investment property is not automatically taxed at 10% under the current framework.

What Property Is Taxed?

The law covers a broad range of property. Common examples include:

• Land and undeveloped plots.
• Residential houses and apartments.
• Commercial buildings.
• Warehouses, offices, and shops.
• Leasehold interests and other property rights.
• Plant, machinery, and business equipment.
• Certain intangible assets.
• Foreign currency and digital assets where the statutory provisions apply.

A property disposal can be taxable even where the seller describes the transaction as a transfer, settlement, exchange, or assignment rather than a conventional sale. The substance and value of the transaction remain relevant.

Sale of land and buildings

A gain may arise where a property is sold for more than the allowable acquisition and improvement cost. Allowable costs may include:

• Original purchase price.
• Legal and professional fees connected with acquisition.
• Stamp duties and registration-related costs where properly documented.
• Estate agency or valuation fees connected with the disposal.
• Capital improvement costs that enhance the property.
• Advertising and transaction expenses directly linked to the sale.

Routine repairs, personal living expenses, and unsupported payments are not automatically allowable. Proper receipts, contracts, valuation reports, and payment evidence are important for calculating the gain.

Principal private residence

The Nigeria Tax Act, 2025 contains an exemption for certain private residences, subject to the statutory conditions. The exemption is not a general exemption for every house sold by every taxpayer.

The relevant analysis may depend on whether the property was the individual’s principal private residence, whether it was used partly for business, the size and nature of adjoining land, and whether only part of the property was disposed of. PwC’s summary of the new regime notes that the private-residence exemption is restricted to a dwelling house with up to one acre of adjoining non-commercial land and may be limited to once in an individual’s lifetime.

A property used as a short-let apartment, office, shop, or rental investment may require a different analysis from a home occupied as the owner’s principal residence.

Property used for business

Where a company sells an office building, factory, warehouse, or investment property, the gain is generally included in the company’s taxable computation under the Nigeria Tax Act, subject to applicable reliefs and exclusions.

For an individual who owns rental property, the tax treatment may involve both rental income and a separate gain on disposal. Rental receipts relate to income from use of the property, while a gain on sale relates to the increase in value realised on disposal.

What Shares Are Taxed?

Shares can be chargeable assets under Section 34 of the Nigeria Tax Act, 2025. This includes shares in Nigerian companies and, in some cases, interests held through intermediary entities where the statutory conditions for an indirect transfer are met.

The former position was more limited. Section 30 of the old Capital Gains Tax Act generally excluded gains from the disposal of Nigerian government securities, stocks, and shares, subject to later amendments and specific rules. Finance Act 2021 introduced conditions under which gains from certain share disposals could become taxable.

The Nigeria Tax Act, 2025 provides a specific exemption for some disposals of shares in Nigerian companies. According to the statutory wording, the disposal is not chargeable where:

• Aggregate disposal proceeds are less than ₦150 million in any 12 consecutive months; and
• The chargeable gain does not exceed ₦10 million in that period.

The Act also provides relief for certain regulated securities-lending transactions and for proceeds reinvested in shares of Nigerian companies within the relevant assessment period. The official Gazette reproduces the ₦150 million proceeds threshold and ₦10 million gain condition.

The ₦150 million figure refers to disposal proceeds, not profit. The ₦10 million figure refers to the chargeable gain. Both conditions matter.

How to Calculate a Chargeable Gain

A simplified calculation is:

[ \text{Chargeable Gain} = \text{Disposal Proceeds}

\text{Allowable Acquisition Cost}

\text{Allowable Improvement and Disposal Costs} ]

Property example

Assume an individual bought a Lagos property for ₦45,000,000. The individual incurred the following documented costs:

The property is later sold for ₦82,000,000.

[ ₦82,000,000 - ₦56,500,000 = ₦25,500,000 ]

The provisional chargeable gain is therefore ₦25,500,000, assuming the costs qualify and no exemption or relief applies.

For an individual, the gain is considered within the person’s applicable tax computation under the Nigeria Tax Act. The final tax cannot be determined from the gain alone because the taxpayer’s other taxable income, applicable rate band, reliefs, and statutory conditions may affect the result.

Company example

A company buys a commercial property for ₦120,000,000 and incurs ₦10,000,000 in documented acquisition and improvement costs. It later sells the property for ₦180,000,000 after paying ₦5,000,000 in directly related disposal costs.

If the company falls within the 30% category under Section 56, the illustrative tax on ₦45,000,000 would be:

[ ₦45,000,000 \times 30% = ₦13,500,000 ]

This is an educational calculation. The actual taxable amount may be affected by losses, reliefs, accounting adjustments, classification, and other provisions of the Act.

Share example

An investor buys shares for ₦18,000,000 and later sells them for ₦42,000,000. Brokerage charges and other directly related costs total ₦500,000.

[ ₦42,000,000 - ₦18,000,000 - ₦500,000 = ₦23,500,000 ]

The gain is ₦23,500,000. If this is the investor’s only relevant disposal during the 12-month period, the proceeds are below ₦150 million but the gain exceeds ₦10 million. The specific share-disposal exemption would therefore not apply on those figures.

Foreign Currency Transactions

Where an asset is bought or sold in US dollars, pounds sterling, euros, or another currency, the transaction should be translated into naira using an appropriate exchange rate for the relevant dates and tax records.

The Central Bank of Nigeria publishes official foreign-exchange data. For example, the CBN reported an NFEM rate of approximately ₦1,329.5138 to US$1 on September 25, 2026.

Suppose a Nigerian property is acquired for US$100,000 when the relevant rate is ₦1,000 per US dollar:

[ US$100,000 \times ₦1,000 = ₦100,000,000 ]

If it is sold for US$125,000 when the relevant rate is ₦1,329.5138:

[ US$125,000 \times ₦1,329.5138 = ₦166,189,225 ]

The naira-based calculation may therefore differ substantially from simply subtracting US-dollar prices. Records should show the exchange rate used, the transaction date, the source of the rate, and the underlying foreign-currency documents.

Capital Losses and Reliefs

A disposal does not always create a gain. Where allowable costs exceed the proceeds, the result may be a capital loss.

The new framework contains rules allowing certain capital losses to be deducted against capital gains from the same class of asset. Unused losses may be carried forward for a limited period, subject to the conditions in the Act. PwC’s explanation of the Finance Act amendments notes the same-class limitation and a five-year carry-forward period for qualifying unused losses.

Rollover relief

Rollover relief can defer the immediate taxation of a gain where the disposal proceeds are reinvested in qualifying replacement assets within the prescribed period.

For shares, Finance Act 2023 expanded the availability of rollover relief where proceeds are reinvested in shares of a Nigerian company within the same year of assessment. The relief does not necessarily mean the gain disappears permanently; it may defer or reduce the amount immediately brought into charge.

The transaction documents should identify:

• The asset sold.
• The original cost.
• The replacement asset.
• The amount reinvested.
• The date of reinvestment.
• The part of the proceeds not reinvested.

Filing and Record-Keeping

Tax administration depends on accurate records. For a property or share disposal, retain:

• Sale agreement or contract note.
• Purchase agreement.
• Evidence of payment.
• Valuation reports.
• Legal and professional invoices.
• Receipts for qualifying improvements.
• Brokerage and estate-agent statements.
• Share certificates or electronic holding statements.
• Foreign-exchange evidence where applicable.
• Details of related-party transfers.
• Evidence supporting a private-residence or reinvestment claim.

The former FIRS filing guidance stated that capital-gains returns were filed with the relevant tax returns and that returns and payment arose upon disposal of chargeable assets. Under the new administration framework, taxpayers should confirm the applicable process and deadline through the Nigeria Revenue Service taxpayer portal, because the former FIRS structure and legal framework have been replaced or reorganised under the tax-reform laws.

A taxpayer can use ToolBase’s Capital Gains Tax Calculator to organise the disposal value, acquisition cost, improvement expenses, and selling costs into a preliminary calculation. The result is an educational estimate, not an assessment issued by the tax authority.

For property transactions, the Property Sale Profit Calculator can also help separate the sale price from documented acquisition and transaction costs before considering exemptions or reliefs.

Common Mistakes in Nigeria

Treating every property sale as exempt

A seller may assume that selling a personal home automatically eliminates tax. The exemption for a qualifying principal private residence has conditions, and mixed-use property may require apportionment.

Applying the old 10% rate

The flat 10% rate belonged to the former Capital Gains Tax regime. From the commencement of the Nigeria Tax Act, 2025, the calculation has to be considered under the new tax-rate structure.

Confusing proceeds with gain

A property sold for ₦150 million does not necessarily produce a ₦150 million gain. The gain is the amount left after allowable costs. For shares, the ₦150 million threshold relates to aggregate disposal proceeds, while the ₦10 million condition relates to chargeable gain.

Ignoring indirect share transfers

A non-resident or corporate group may dispose of an offshore holding company rather than directly selling shares in a Nigerian company. The new law addresses certain indirect transfers where Nigerian assets or ownership thresholds are involved. PwC identifies indirect transfers as a significant feature of the new regime.

Using unsupported costs

An estimate based on memory is not the same as a documented tax computation. Keep invoices, bank evidence, contracts, receipts, and valuation records.

Practical Calculation Checklist

Before calculating capital gains tax in Nigeria, identify:

1. The taxpayer’s status: individual, company, trust, or non-resident.
2. The asset: property, shares, digital asset, currency, or another chargeable asset.
3. The acquisition date and cost.
4. The disposal date and proceeds.
5. Allowable improvement and transaction costs.
6. Any capital loss from the same class of asset.
7. Any residence, share-disposal, securities-lending, or rollover relief.
8. The applicable individual or company tax rate.
9. The filing and payment procedure under the current NRS system.
10. The documents supporting every figure.

Conclusion

Capital gains tax in Nigeria applies to gains from disposing of many assets, including property and shares. Under the Nigeria Tax Act, 2025, the former flat 10% regime has been replaced by rules that generally tax individuals at applicable personal income-tax rates and companies according to the company tax framework. Property exemptions, share-disposal thresholds, reinvestment relief, capital losses, and indirect-transfer rules can materially change the result.

This article is for educational purposes only and does not constitute professional advice. Consult a qualified professional for your specific situation.

References

The main legal basis is the Nigeria Tax Act, 2025, including Section 33 on chargeable gains, Section 34 on chargeable assets, Section 56 on company tax rates, and Section 58 on individual tax rates. The Act repeals the former Capital Gains Tax Act from its commencement.

The former position is found in the Capital Gains Tax Act, Cap. C1, LFN 2004, including Section 3 on chargeable assets, Section 11 on the computation of gains, and Section 30 on stocks and shares.

The Central Bank of Nigeria exchange-rate data used for the foreign-currency illustration comes from the CBN’s official exchange-rate publication.

The Nigeria Revenue Service describes the reform as replacing the flat 10% capital-gains rate with taxation under the relevant income-tax framework.

Last updated: September 26, 2026