There’s something deeply satisfying about selling an asset for more than you paid for it. Whether it’s that plot of land you bought years ago in a developing area, the house you built with your savings, or shares you’ve patiently held in a growing company, watching your investment pay off feels like a reward for planning ahead.
But while you’re celebrating your financial win, the taxman is also taking notes. The Nigeria Tax Act, 2025 brings new clarity, and some important changes, to how Capital Gains Tax (CGT) works. Understanding these rules can help you avoid unwelcome surprises, claim legitimate exemptions, and keep more of what you’ve earned.
Here’s everything you need to know about CGT in today’s Nigeria according to the new Tax Act.
What Creates a Taxable Gain?
A chargeable gain is simply the profit you make when you sell a chargeable asset for more than it cost you. It sounds straightforward, but the details matter. Chargeable assets include land and buildings, business premises, shares and securities (above certain thresholds), intellectual property or goodwill, and even digital assets like cryptocurrencies and NFTs.
According to the new law, the current CGT rate is 10% of your net chargeable gain. It remains unchanged from the old rate but is now applied with clearer definitions and enforcement mechanisms. To calculate it, subtract your total cost of acquisition (including legal fees surveys, and improvement expenses) from your sale price. Then apply the 10%.
Consider this example: You bought a plot of land for ₦10 million and spent ₦1 million on legal fees and survey costs. Years later, you sell it for ₦20 million. Your gain is ₦9 million (₦20m sale price minus ₦11m total cost). That ₦9 million is subject to CGT at the current rate of 10%. The key insight is that legitimate expenses of buying, improving and selling the asset reduce your taxable gain. A good record-keeping of these costs can save you significant money.
How to Calculate Tax When You Sell Property
Selling real estate is probably the most common situation where CGT applies. The 2025 Tax Act makes the process clearer, though it still requires proper documentation. The 2025 Act preserves the 10% rate but tightens documentation requirements.
- Sale proceeds: The full amount you received from the buyer.
- Allowable costs: Original purchase price, stamp duties, survey and legal fees, capital improvement, and selling costs (such as agent commissions).
- Net gain: Sale proceeds minus allowable costs.
- Capital Gains Tax due: 10% of the net gain.
If you sell a property in parts, for instance, you subdivided a plot into several smaller lots, you must apportion costs proportionally to determine the gain on each disposal. Losses, on the other hand, are treated more generously now. A capital loss can be carried forward for four years to offset future capital gains.
The ₦100 Million Rule for Shares
The government wants to deepen Nigeria’s investment culture while distinguishing between small, individual investors and large, institutional traders. The new ₦100 million annual threshold for share disposals does exactly that. According to the rule, if your total proceeds from selling shares or securities in a year don’t exceed ₦100 million, you pay no capital gains tax. However, once your proceeds exceed ₦100 million, only the excess amount is taxed at 10%.
For instance, if you sell shares worth ₦120 million in 2026, you’ll pay CGT only on ₦20 million, that is, ₦2 million in tax (10% of ₦20m). This approach ensures that retail investors remain exempt while high-value trades contribute proportionally to the revenue pool. It also aligns Nigeria’s policy with emerging-market peers like Kenya and Ghana, which have similar thresholds for share disposals.
Reinvestment or the Rollover Relief
The reinvestment exemption (sometimes called “rollover relief”) remains one of the most powerful tools available to investors, yet few take advantage of it. According to the new rule, if you reinvest the entire proceeds from selling an asset into acquiring another qualifying asset within one year, you can defer paying CGT on that gain. The deferred gain will only become taxable when you eventually sell the new asset without reinvesting again.
If you reinvest part of the proceeds, however, the exemption applies proportionally.
For example, Folake sells land for ₦50 million, realizing a ₦20 million gain. If she reinvests the full ₦50 million in another property within 12 months, she can defer CGT on the entire ₦20 million. If she reinvests only ₦30 million, then only 60% of the ₦20 million gain, that is, ₦12 million, qualifies for exemption, and she’ll pay CGT on the remaining ₦8 million (₦800,000).
This provision effectively rewards investors who continue circulating capital in productive assets rather than just cashing out for consumption.
Special Situations: Gifts, Inheritances and Forced Sales
Life doesn’t always unfold as a clean sale transaction. The new Act clarifies how CGT applies to involuntary or non-monetary transfers.
Gifts: Transfers to family or friends are still treated as disposals at market value and any gain is taxable at 10%. Gifts to registered charities or between spouses remain exempt.
Inheritances: No CGT applies at the point of inheritance, but when the heir eventually sells the asset, CGT is computed based on the value at the time of inheritance.
Compulsory acquisitions: If your property is acquired by government or a public body, you may claim rollover relief by reinvesting the compensation in another property within 12 months.
Real-Life Examples
Example 1: The Property Investor Kemi bought a duplex in 2020 for ₦25 million. She spent ₦2 million on legal fees and ₦3 million on renovations. In 2026, she sells it for ₦45 million, paying ₦500,000 in selling costs. Her gain is ₦14.5 million (₦45m – ₦30.5m), resulting in CGT of ₦1.45 million.
Example 2: The Share Trader Ade sells shares worth ₦80 million in 2026, and makes a profit of ₦15 million. Since his total proceeds are below ₦100 million, he pays no CGT at all.
Example 3: The Strategic Reinvestor Chidi sells commercial property for ₦100 million with a ₦30 million gain. He immediately reinvests the full amount in another commercial property. By applying for the reinvestment exemption, he defers the entire ₦3 million CGT liability.
How Taxpal Can Help
Calculating capital gains tax can be complex, especially when dealing with multiple assets, reinvestment opportunities, or special situations. Taxpal provides comprehensive CGT support, including gain calculations, exemption analysis, reinvestment planning and compliance documentation.
Visit their website to explore their consultation services or portal access options. Whether you’re planning a single sale or managing a portfolio of assets, they’ll help you navigate CGT requirements efficiently and maximize your legitimate tax savings.
