A Life in Tax: Is Commercial Rent VATable under the Nigeria Tax Act 2025. It was one of those familiar moments in practice. A client leaned forward across the table and asked, confidently, “Since everything seems taxable now, I assume rent on my commercial property attracts VAT?”
I paused, not because the question was new, but because the law had just changed, and assumptions are usually where tax mistakes begin.
Under the new Act, VAT is not imposed simply because a transaction involves money or a commercial arrangement. The starting point is always the exemption list. Section 185(1) is explicit.
Among the supplies exempt from VAT are “land or building including interest in land or building.” That single line, tucked among oil exports, baby products, agricultural equipment, and diplomatic supplies, carries significant weight.
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Rent is not a separate asset; it is a consideration paid for an interest in land or a building. Once land and buildings themselves are exempt, the rent derived from granting an interest in them follows the same treatment.
The law does not carve out commercial property from this exemption, and it does not distinguish between residential and commercial use.
This is one of those moments in a tax career where clarity matters more than complexity. Despite the commercial nature of the transaction, rent on land or buildings remains VAT-exempt under the new Act.
No VAT is chargeable on commercial rent, provided the transaction is purely a lease or rental of land or buildings and not bundled with separately identifiable taxable services.
In tax practice, this is a reminder that the discipline is not about what feels taxable, but what the law actually says and says clearly, if you take the time to read it carefully.
Olatunji Abdulrazaq CNA,ACTI,ACIArb(UK)
Founder/CEO,Taxmobile.Online
