Rent Relief Replaces CRA: What Tenants and Homeowners Should Know

For years, every Nigerian taxpayer received the Consolidated Relief Allowance (CRA): the higher of ₦200,000 or 1% of gross income, plus 20% of gross income. It was automatic and did not depend on how you lived. The Nigeria Tax Act, 2025 abolishes it.

How rent relief works

• You can deduct 20% of the annual rent you pay on your residence.
• The relief is capped at ₦500,000 a year — reached when annual rent hits ₦2,500,000.
• You must declare your rent and provide supporting information, such as a tenancy agreement and evidence of payment.

The homeowner gap

If you own your home or live rent-free, you cannot claim rent relief. Your only personal relief is the 0% band on the first ₦800,000 of income. For a homeowner on ₦10 million a year, losing the CRA (which was worth ₦2.2 million of relief — ₦200,000 plus 20% of gross income) with nothing to replace it is a real increase in taxable income.

Practical tips

• Keep tenancy agreements, receipts and bank transfer records — an employer or the tax authority may ask for them.
• Pay rent through traceable channels rather than cash where possible.
• If rent is paid in advance for more than one year, ask your adviser how the relief should be spread.
• Couples sharing rent should agree who claims what, so the same rent is not claimed twice.

For employers

Payroll can only apply rent relief if employees declare their rent. Set up a simple annual declaration process, keep the evidence on file, and update the figure when tenancies change.