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
- Digital assets like cryptocurrencies and NFTs
The basic calculation: Take what you sold the asset for, subtract what it cost you (including allowable expenses), and the difference is your taxable gain.
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. 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.
Step 1: Determine your sale proceeds or the actual amount you received from the buyer.
Step 2: Subtract your allowable costs:
- Original purchase price
- Direct acquisition costs (stamp duty, survey, legal fees)
- Capital improvements you made (but not routine maintenance)
- Selling costs (agent commissions, legal fees)
Step 3: Calculate the tax by multiplying your net gain by the CGT rate (currently 10%).
Important considerations:
If you sell only part of a property—like subdividing a plot of land—you must allocate costs proportionally to determine the gain on that portion.
And if you make a loss (sell for less than your total allowable cost), there’s no CGT payable. Better yet, you can carry this loss forward to offset against future gains.
The ₦100 Million Rule for Shares
Nigeria wants to encourage ordinary citizens to participate in the stock market, so the Tax Act 2025 provides generous exemptions for share investors.
The exemption: If your total proceeds from selling shares and securities in a year don’t exceed ₦100 million, you pay no CGT at all.
The threshold: Once your annual proceeds cross ₦100 million, only the excess amount is taxable.
Here’s how it works in practice: If you sell shares worth ₦120 million in a year, the first ₦100 million is tax-free. You’ll pay CGT only on the remaining ₦20 million.
Key points to remember:
- This applies whether you sell in one large transaction or several smaller ones throughout the year
- You must track all your share disposals to know where you stand
- The rule protects small investors while ensuring larger players contribute fairly
Reinvestment: Your Best Tax Strategy
One of the most powerful features of CGT law is the reinvestment exemption, and it’s seriously underutilized by investors.
How it works: If you sell an asset and reinvest the proceeds into acquiring another similar or qualifying asset within one year, you may defer or even avoid paying CGT on the gain.
Why it matters: This is particularly valuable for property investors who “roll over” proceeds from one property into another, or businesses reinvesting in productive assets.
To qualify, you must:
- Fully reinvest the sale proceeds
- Complete the reinvestment within one year
- Apply formally and provide evidence of the reinvestment
Partial reinvestment: If you reinvest only part of the proceeds, only the corresponding portion of the gain may be exempt.
Consider Folake, who sells land for ₦50 million (with a ₦20 million gain). If she uses the full ₦50 million to buy another property within a year, she can defer the entire ₦20 million gain. If she only reinvests ₦30 million, she can defer CGT on ₦12 million of the gain (proportionally).
Special Situations: Gifts, Inheritances and Forced Sales
Life doesn’t always involve straightforward sales, so the law recognizes different types of transfers.
Gifts: When you give away an asset, it’s still considered a disposal for tax purposes. CGT may apply if the market value at the time of the gift exceeds your original cost. However, gifts to registered charities or between spouses are typically exempt.
Inheritances: Inheriting property doesn’t attract CGT at the point of inheritance. However, if you later sell the inherited asset, any gain (calculated from its value at the date of inheritance) may be taxable.
Forced sales: If the government compulsorily acquires your property, you may receive relief or exemption, particularly if you reinvest the compensation into another asset within the specified timeframe.
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, making 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.
What You Should Do Now
1. Keep detailed records: Document all acquisition costs, improvement expenses, and sale proceeds. This includes receipts for legal fees, survey costs, renovation expenses, and agent commissions.
2. Track your annual share sales: If you’re an active investor, monitor your total annual proceeds to know when you’re approaching the ₦100 million threshold.
3. Consider reinvestment opportunities: If you’re planning to sell an asset, explore whether you can reinvest the proceeds to defer CGT liability.
4. Plan your timing: Since the ₦100 million threshold applies annually, you might benefit from timing share sales across different years.
5. Understand your exemptions: Know which transfers qualify for exemptions and ensure you meet the requirements to claim them.
The Bottom Line
The Nigeria Tax Act, 2025 simplifies and modernizes capital gains taxation while maintaining investor-friendly reliefs and exemptions. The key to success isn’t avoiding CGT entirely, it’s understanding the rules well enough to minimize your liability legally.
Whether you’re selling land, cashing out shares, or transferring property to family, knowing what counts as a gain, what expenses you can claim, and what exemptions you can use makes all the difference.
Selling assets should feel like a reward for your foresight and planning, not a tax trap. With proper knowledge and documentation, you can minimize the tax bite and keep more of what you’ve built. Remember: the wealth you preserve through smart tax planning is wealth you can reinvest and grow. That’s not just good for you but also for the entire economy.
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 our 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.
