Tax reform, mortgage access to shape Nigeria’s real estate sector in 2026

Real estate industry leaders have said that a combination of the new tax regime and improved access to mortgage financing will define the trajectory of the sector in 2026.

The leaders who spoke at the 10th Alphacrux Real Estate Outlook Conference 2026 in Lagos on Thursday agreed that while the new tax regime has pushed up rents and property prices, it could ultimately strengthen the market if revenues are reinvested in infrastructure and aligned with broader housing reforms.

Tobi Adama, chief executive officer of Alphacrux and convener of the conference, said the tax changes have had an immediate market impact as landlords and developers pass additional costs to tenants and buyers.

“We are still grappling with the new tax reform, but one of the effects we’ve seen is that it has automatically increased rents and property prices,” Adama said, adding, “Most property owners are adding the equivalent of the tax to existing prices.”

However, Akin Opatola, founder of Olawale Jordan Company, described the reform as a necessary step in the right direction, particularly if it is targeted appropriately.

“Tax is a need rather than a desirable product,” Opatola said. “If we want money to grow, we must also have money to spend. I think the reform is innovative and fantastic,” he noted.

Opatola noted further that the controversial 1.5 percent tax is largely aimed at the upper end of the property market, particularly high-end and luxury developments, many of which he said are already priced at levels comparable to global markets.

He argued that taxing luxury apartments could become a new revenue driver for the government, but warned that infrastructure gaps must be addressed for such policies to deliver full value. Using Banana Island as an example, Opatola said poor road access, drainage, street lighting, and security undermine the investment appeal of premium locations.

He added that stronger collaboration between the government and the organised private sector could help translate tax revenues into smarter, more resilient cities.

Beyond tax policy, Adama pointed to broader macroeconomic indicators that he said signal a more positive operating environment for real estate in 2026. He cited moderating inflation, growing external reserves, and renewed foreign investor interest as developments that could support demand for residential, commercial, and industrial properties.

Speakers highlighted finance as the biggest determinant of sector performance in 2026.

The convener described the federal government-backed Ministry of Finance Real Estate Investment Fund (MREIF) as a potential turning point for Nigeria’s housing sector, noting that its single-digit interest rate of 9.75 percent could significantly expand home ownership. He added that pension contributors can access up to 25 percent of their contributions as a down payment under the scheme.

“If it is well managed and allowed to grow, this could be one singular policy that will totally change the industry,” Adama said.

That view was reinforced by Nun Dada, manager of home loans at Stanbic IBTC Bank, who provided details on the mortgage scheme designed to reduce Nigeria’s housing deficit.

Dada said the initiative is structured to support both housing supply and demand. The first tranche of N250 billion, which went live in mid-2025, is already managed by a dedicated fund manager, helping to address concerns around governance and fund availability.

“What makes this scheme attractive is the interest rate of 9.75 percent,” Dada said, noting that it is significantly lower than prevailing commercial lending rates. He added that about 75 percent of the fund is targeted at demand, enabling individuals to purchase homes, while the remaining portion supports developers through guaranteed funding structures.

According to Dada, the facility is accessible to salaried workers, self-employed individuals, and Nigerians in the diaspora, with mortgage tenors of up to 20 years, subject to age and retirement considerations.

Panellists also addressed rising construction costs and pricing pressures, with developers sharing strategies such as fixed-price supply contracts, value engineering, and constant communication with buyers to maintain quality without losing clients.