15 Tax Deductions Nigerian Landlords Can Claim in 2026

The Nigeria Tax Act 2025 eliminated the Consolidated Relief Allowance and created a paper trail on rental income. Deductions are now the only way to reduce your tax bill.

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Most Nigerian landlords pay tax on their full rental income. They deduct nothing.

Every naira spent on roof repairs, property insurance, management fees, legal costs, and Land Use Charge could reduce your taxable income. But if you don't claim it and you don't document it, you pay tax as if those expenses never happened.

The Nigeria Tax Act (NTA) 2025 made this worse. The Consolidated Relief Allowance that previously shielded roughly 21% of your gross income is gone. There is no automatic deduction anymore. What remains are specific expenses you can prove you incurred to earn rental income.

This guide covers 15 deductions you can legally claim, how withholding tax works, what changed under the new law, and how to track everything so your next tax filing is painless.

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How rental income is taxed in Nigeria

Two tracks. Which one applies depends on whether you hold property as an individual or through a company.

Individual landlords

Rental income is personal income. It gets added to your salary, business income, and investment income, then taxed at progressive rates under the NTA 2025.

Taxable income (₦)	Rate
First 800,000	0%
800,001 – 3,000,000	15%
3,000,001 – 12,000,000	18%
12,000,001 – 25,000,000	21%
25,000,001 – 50,000,000	23%
Above 50,000,000	25%

The ₦800,000 zero-rate threshold is new. If your total taxable income after deductions falls below this, you owe nothing.

The old Consolidated Relief Allowance is gone. No more automatic 21% deduction. Every expense you claim now reduces taxable income directly, which makes documentation more important than ever.

Individual landlords have limited access to capital allowances and can only deduct mortgage interest on loans used to build an owner-occupied home. Not investment property.

Corporate landlords

Rental income earned through a company is taxed at flat rates based on company size.

Company category	Turnover threshold	CIT rate
Large	Above ₦100M	30%
Medium	₦50M – ₦100M	20%
Small	≤₦50M + fixed assets below ₦250M	0%

Corporate landlords get full access to capital allowances on buildings (10% annually), furniture and fittings (20%), and plant and machinery (20%). Mortgage interest on loans used to acquire or develop rental property is fully deductible. Bad debt write-offs are straightforward.

Real Estate Investment Companies (REICs) approved by the SEC pay zero income tax on rental income, provided at least 75% is distributed to shareholders within 12 months.

Should you incorporate?

If you hold 3 or more properties and spend significantly on renovations, furnishing, or equipment, a corporate structure unlocks wider deductions, full capital allowances, and potentially a 0% tax rate if turnover stays below ₦50M. The trade-off is compliance cost: audited financials, CIT filing, company maintenance fees. Talk to a tax advisor before making the switch.

Below, each deduction is tagged so you know whether it applies to individuals, companies, or both.

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The deductibility test

Nigeria's standard: an expense must be "wholly, exclusively, necessarily, and reasonably" incurred in producing rental income.

In plain language, the expense must relate directly to earning rent. Personal expenses don't qualify. If an expense serves both personal and rental purposes, you can only deduct the rental portion.

One rule applies across the board. If you can't prove the expense, you can't deduct it. Receipts, invoices, contracts, and bank statements are non-negotiable.

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The 15 deductions

1. Repairs and maintenance

Individual + Corporate

Roof repairs. Plumbing. Electrical faults. Repainting. Fixing tenant damage. Replacing broken fixtures. All deductible.

The line is between restoring and improving. Fixing a leaking roof is a deductible repair. Replacing a zinc roof with a stone-coated roof is an improvement and counts as capital expenditure. Not deductible as an expense, but may qualify for capital allowances if you're incorporated.

A landlord earning ₦5,000,000 in rent who spends ₦500,000 repairing a leaking roof and repainting the building deducts the full ₦500,000 from taxable income.

2. Property insurance premiums

Individual + Corporate

Fire, theft, flood, and natural disaster coverage on the rental property. Fully deductible.

The Nigeria Insurance Industry Reform Act (NIIRA) makes building insurance compulsory for certain property categories. That premium is deductible. You're paying it because the law requires it and because it protects your income-producing asset.

3. Property management fees

Individual + Corporate

Fees paid to property managers for tenant placement, rent oversight, maintenance coordination, and reporting. Fully deductible as a cost of earning rental income.

If you're a diaspora landlord paying a local property manager to handle your Nigerian rental portfolio, every naira of that management fee is deductible.

4. Agent and broker commissions

Individual + Corporate

Fees paid to agents or brokers for securing tenants. Deductible.

One caveat: if you pay an agent more than a certain threshold, you may need to deduct 10% withholding tax from their payment and remit it to the tax authority. Keep records of these payments and any WHT remittance receipts.

5. Legal fees

Individual + Corporate

Drafting tenancy agreements. Defending title disputes. Resolving boundary issues. Regularizing property documents. All deductible when related to the rental business.

Legal fees for the initial acquisition of property are different. Those are capital in nature and not deductible as an expense. The distinction matters. Fees to defend your title to a property you already rent out are deductible. Fees to buy the property in the first place are not.

6. Land Use Charge and tenement rates

Individual + Corporate

State and local government taxes levied on your rental property. Deductible.

Lagos enforces Land Use Charge aggressively, with penalties for non-payment and a 15% discount for early payment. Pay on time, get the discount, and deduct the full amount. Income tax itself is never deductible.

7. Advertising and vacancy costs

Individual + Corporate

Listing fees. Online ads. Signage. Marketing expenses to find tenants for vacant units. Fully deductible.

A vacant unit earns no rent. The money you spend filling it is a direct cost of producing rental income.

8. Security costs

Individual + Corporate

Security guard wages. Gateman salary. Operational security for the property. Deductible.

Security equipment like CCTV cameras, access control systems, and perimeter fencing is capital expenditure. Not immediately deductible, but corporate landlords can claim capital allowances on it at 20% annually.

9. Utility costs borne by the landlord

Individual + Corporate

Electricity, water, and waste disposal for common areas or included in the rental arrangement. Deductible when clearly linked to the rental property.

If you pay PHCN bills for common-area lighting in a multi-unit property, that's deductible. If you're paying your own personal electricity bill and trying to call it a rental expense, that's not.

10. Service charge expenses

Individual + Corporate

Estate service charges and maintenance levies paid by the landlord. Deductible.

These are charges your estate or property management company bills you for maintaining shared infrastructure like roads, drainage, common areas, and generators. If you pay them to keep your rental property operational, they reduce your taxable income.

11. Professional fees

Individual + Corporate

Accountancy fees. Tax advisory fees. Tax return preparation costs. Fully deductible when related to the rental business.

The tax advisor who helps you claim these deductions is themselves a deductible expense.

12. Travel expenses for property management

Individual + Corporate

Travel costs incurred specifically for property inspections, tenant meetings, and viewings. Must be wholly for the rental business. Mixed personal and business trips need apportioning. You can only deduct the portion related to the property.

13. Bad debt (unrecoverable rent)

Individual + Corporate (easier to claim for companies)

Rent owed by tenants that is genuinely irrecoverable and specifically written off. Deductible.

The key word is "specifically." A general provision for tenants you think might not pay is not deductible. You need evidence the debt is irrecoverable: demand letters, failed recovery attempts, legal action. Corporate landlords have a clearer statutory basis for bad debt deductions. Individual landlords can claim but face a higher documentation burden.

14. Mortgage interest

Limited for individuals / Full for corporate

Corporate landlords can deduct interest on loans used to acquire or develop rental property. Subject to a 30% of EBITDA cap on related-party debt.

Individual landlords face a significant limitation. Under the NTA, interest is only deductible on loans used to build (develop) an owner-occupied home. Loans taken to purchase investment or rental property do not qualify. This is one of the clearest advantages of corporate structuring.

Principal repayments are never deductible for either category.

15. Depreciation (capital allowances)

Limited for individuals / Full for corporate

Nigeria does not allow accounting depreciation as a tax deduction. Instead, capital allowances apply at statutory rates.

Asset	Annual rate
Buildings	10%
Furniture and fittings	20%
Plant and machinery	20%
Motor vehicles	25%

Corporate landlords claim the full schedule. A company that spends ₦20,000,000 on a building can deduct ₦2,000,000 per year in capital allowances, reducing taxable income even beyond operating expense deductions.

Individual landlords have limited access to these allowances. If you hold multiple properties with significant capital expenditure, this is one of the strongest arguments for incorporating.

One restriction: the maximum capital allowance deductible in any year is two-thirds of assessable profit. Excess carries forward to the next year.

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Withholding tax: the 10% you need to understand

Corporate tenants deduct 10% withholding tax (WHT) from rent at source and remit it to the tax authority. This applies to all landlords, individual and corporate.

Individual tenants are no longer required to deduct WHT under the 2025 Withholding Tax Regulations. If your tenants are individuals paying from their personal accounts, no WHT applies.

WHT is not a final tax. It is a prepayment, a credit against your total income tax liability. You still declare the full rental income when filing. The WHT already deducted gets offset against what you owe.

You must collect WHT credit notes from corporate tenants. Without the credit note, you lose the credit and effectively pay tax twice on the same income.

A welcome reform under the new regulations: you receive the WHT credit even if the corporate tenant fails to remit the withheld amount to the tax authority. The landlord is no longer penalized for the tenant's failure.

Example: A corporate tenant pays ₦5,000,000 annual rent. They withhold ₦500,000 (10%) and pay you ₦4,500,000. When filing, you declare the full ₦5,000,000 as rental income. Your computed tax liability is ₦483,000. You offset the ₦500,000 WHT credit, leaving a ₦17,000 overpayment you can apply to next year's liability or request as a refund.

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What is NOT deductible

Not every property-related expense reduces your tax bill.

Capital improvements like adding a new room, converting a 2-bedroom to a 3-bedroom, or installing a borehole where none existed. These improve the property beyond its original condition. Not deductible as expenses. Corporate landlords can claim capital allowances on qualifying improvements instead.

Personal expenses unrelated to the rental property.

Income tax. You cannot deduct income tax from income tax.

Mortgage principal repayments. Interest may be deductible (see #14 above), but principal never is.

Fines and penalties from regulatory or tax authorities.

Any expense without documentation. No receipt, no deduction.

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NTA 2025 changes that affect your deductions

Five changes every landlord needs to know.

The CRA is gone. The Consolidated Relief Allowance, roughly 21% of gross income, no longer exists. There is no automatic deduction. Every naira of tax reduction now comes from specific, documentable expenses. This makes the 15 deductions above more valuable than they were under the old law.

Rent Relief creates a paper trail. Tenants can now claim a deduction of 20% of annual rent paid, capped at ₦500,000. To claim it, they must declare how much rent they paid and to whom. This creates documentation that makes your rental income visible to the tax authority, even if you never declared it before.

Capital gains tax went up. Selling a rental property used to attract a flat 10% CGT. Under the NTA 2025, capital gains are taxed at your marginal income tax rate, up to 25% for individuals and 30% for companies. One exception: a lifetime exemption for selling your principal private residence.

Expanded tax residency rules. The NTA 2025 broadened residency criteria beyond the 183-day physical presence test. If you maintain a permanent home available for your use in Nigeria, or have immediate family (spouse, children) living in Nigeria, you may be deemed tax resident even if you live in London, Toronto, or Houston. This matters because Nigerian tax residents are liable for worldwide income. Double taxation agreements with the UK, US, Canada, and others provide protection.

Stamp duty on leases. Leases under 7 years incur stamp duty at 0.78% of the consideration. Leases of 8 to 21 years at 3%. Transactions below ₦10,000,000 are exempt. Unstamped lease documents are inadmissible as evidence in court.

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How to track deductions year-round

Tax filing is painful when you spend March hunting for receipts from eleven months ago. The fix is simple: separate your rental finances from everything else.

Open a dedicated bank account for rental income and expenses. Every naira of rent received goes in. Every property-related expense goes out. At year-end, your bank statement is your deduction schedule.

Keep receipts, invoices, and contracts for at least 6 years. The tax authority can audit you for up to 6 years after filing.

If you own multiple properties, separate each property's income and expenses. Know what each property earns and what it costs. This is also how you identify which properties are actually profitable and which ones are draining your portfolio.

Record the date, amount, vendor, and purpose of every expense. A ₦200,000 receipt for "maintenance" tells you nothing in March. "₦200,000, plumbing repair, Unit 3, AquaFix Ltd, July 14" tells you everything.

Roofteller gives you a dedicated account for each property. Every transaction is automatically categorized. Your bookkeeping stays current without spreadsheets or manual entry, and your records are audit-ready year-round.

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Filing your return

Individual landlords file personal income tax returns with their State Internal Revenue Service (SIRS), based on your state of residence. Deadline: March 31 each year for the preceding calendar year. Lagos landlords file through the LIRS e-Tax portal. Other states have their own portals.

Corporate landlords file company income tax returns with the Nigeria Revenue Service (NRS, formerly FIRS) via the TaxPro-Max portal. Deadline: six months after the end of your company's accounting year.

What you need: tenancy agreements, rental income records and bank statements, WHT credit notes from corporate tenants, receipts and invoices for all deductible expenses, and property title documents.

A Tax Identification Number (TIN) is mandatory. Under the NTA 2025, your NIN effectively serves as your TIN for individual taxpayers.

Late filing carries real penalties. ₦100,000 for the first month late. ₦50,000 for every additional month.

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Worked example: how deductions save you money

Scenario: You earn ₦5,000,000 in annual rent from two properties. You have no other taxable income. You spent ₦1,200,000 on allowable expenses: repairs (₦500,000), property management (₦300,000), insurance (₦150,000), Land Use Charge (₦100,000), and professional fees (₦150,000).

Without deductions: Taxable income = ₦5,000,000 Tax = ₦0 on first ₦800K + ₦330,000 on next ₦2.2M (15%) + ₦360,000 on next ₦2M (18%) = ₦690,000

With deductions: Taxable income = ₦5,000,000 – ₦1,200,000 = ₦3,800,000 Tax = ₦0 on first ₦800K + ₦330,000 on next ₦2.2M (15%) + ₦144,000 on next ₦800K (18%) = ₦474,000

You save ₦216,000. That is the cost of ignoring deductions, and it scales up with every additional property and every additional naira of allowable expense.

If you had incorporated as a small company (turnover below ₦50M, fixed assets below ₦250M), the CIT rate is 0%. Your tax bill would be ₦0, and you'd claim capital allowances on the building, furniture, and equipment to carry forward against future years when your turnover grows.

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FAQ

Do I need to pay tax on rental income if my tenant already paid withholding tax?

Yes. WHT is a prepayment, not a final tax. You declare the full rental income and offset the WHT credit against your computed tax liability. If your marginal tax rate is higher than 10%, you owe the difference.

Can I deduct the cost of renovating my rental property?

It depends on what you did. Repairs that restore the property to its original condition (fixing a roof, repainting, replacing broken plumbing) are deductible. Improvements that upgrade the property beyond its original state (adding rooms, converting floor plans, installing new infrastructure) are capital expenditure. Not immediately deductible, but corporate landlords can claim capital allowances at 10% annually on buildings and 20% on fittings.

I live abroad. Do I still need to file Nigerian taxes on my rental income?

Yes. Rent from Nigerian property is Nigerian-source income and taxable in Nigeria regardless of where you live. The NTA 2025 also expanded tax residency criteria. If you maintain a permanent home or immediate family in Nigeria, you may be classified as tax resident and liable for worldwide income. Double taxation agreements with the UK, US, Canada, South Africa, and others protect against being taxed twice on the same income. Get professional advice on your residency status.

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Roofteller tracks your rental income, categorizes expenses by property, and keeps your books audit-ready year-round. Open your landlord account at roofteller.com.

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This guide is for informational purposes only and does not constitute tax advice. Tax laws are subject to interpretation and change. Consult a qualified tax professional for advice specific to your situation.