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The short answer
Both countries have a claim. Nigeria taxes gains on assets located in Nigeria, and Canada taxes its residents on worldwide gains. The Canada–Nigeria tax agreement (in force since 16 November 1999) covers capital gains, and Canada’s foreign tax credit then reduces Canadian tax by the Nigerian tax paid, up to the Canadian tax on that gain. Read the agreement’s capital gains article for the exact allocation in your case.
You live in Canada and are selling a house, flat or plot in Nigeria. Which country taxes the gain, and do you pay twice? The answer comes from three layers: Nigerian law, Canadian law, and the tax agreement between the two countries.
Layer 1: Nigeria taxes gains on Nigerian assets
Under the Nigeria Tax Act 2025, in force from 1 January 2026, PwC’s summary of the capital gains reforms says gains are taxable where the asset is located, or deemed located, in Nigeria. For individuals, PwC’s tax summary (reviewed 29 May 2026) says capital gains tax now aligns with personal income tax rates, and that there is a once-in-a-lifetime exemption for a principal private residence with up to one acre of land. Land and buildings in Nigeria are plainly located in Nigeria, so a Canadian resident selling them falls within the Nigerian rules.
Layer 2: Canada taxes its residents on worldwide gains
A Canadian resident reports worldwide income, as the CRA’s guide for residents abroad (T4131) explains. A gain on Nigerian property is reported on Schedule 3. The CRA’s T4037 guide says you convert proceeds at the rate when sold and cost at the rate when acquired, and describes the inclusion rate as generally one-half, so half of the Canadian-dollar gain is taxable.
If the property was your home, the principal residence exemption may reduce the Canadian gain; see Can a house in Nigeria be your principal residence?
Layer 3: the tax agreement
Canada and Nigeria signed an agreement on avoiding double taxation of income and capital gains in Abuja on 4 August 1992; it entered into force on 16 November 1999 (Canada Treaty Series 1999/48). It contains rules on which country may tax capital gains and how double taxation is eliminated.
Two practical points hold regardless of the exact wording. First, the agreement does not stop Canada taxing a resident’s worldwide gains; Canada relieves the double tax through its credit. Second, the agreement’s tie-breaker for dual residence matters if you split time between both countries; see the residence tie-breaker.
How the foreign tax credit works
CRA Folio S5-F2-C1 (modified 31 March 2026) says the credit for non-business income tax is the lesser of the foreign tax paid and the Canadian tax on that income, worked out country by country. Unused non-business foreign tax credit cannot be carried to other years. Tax voluntarily paid, or paid above the amount a treaty allows, is not creditable; you are expected to seek a refund from the foreign authority.
Worked example (illustrative figures)
| Step | Amount (example) |
|---|---|
| Canadian-dollar gain on Lagos flat | $60,000 |
| Taxable half | $30,000 |
| Canadian tax on that at an assumed 40% marginal rate | $12,000 |
| Nigerian tax paid on the gain (converted) | $9,000 |
| Foreign tax credit (lesser of $9,000 and $12,000) | $9,000 |
| Net Canadian tax on the gain | $3,000 |
If the Nigerian tax had been $14,000, the credit would stop at $12,000, and the extra $2,000 would not be recovered in Canada.
Order and timing
The Nigerian tax is assessed under Nigerian procedures, which may run around the time of the sale, while the Canadian tax is settled when you file for the year of sale. Aim to finish the Nigerian side first: when you file in Canada, you need the Nigerian assessment and receipt you need to claim the credit. If the Nigerian tax is assessed later, or revised, you may need to ask the CRA to adjust the return for the year of sale.
Keep in mind that the foreign tax credit is per country and per year. If you sell two Nigerian properties in the same year, the Nigerian tax on both is pooled against the Canadian tax on the Nigerian income for that year.
Steps when selling
- Work out the Nigerian tax position with a Nigerian adviser and keep the assessment and receipts.
- Calculate the Canadian-dollar gain using acquisition and sale-date rates.
- Check whether any years qualify for the principal residence exemption.
- Claim the foreign tax credit with proof of Nigerian tax paid.
- Keep everything for at least six years.
Where Pryme fits
Sale proceeds paid in naira can land in your Pryme naira account details and stay in naira until you decide to convert with Swap, which shows the rate and the fee before you approve. A verifiable statement from VerifyDoc.ai (receipts) records the date and amount received.
Questions people ask
Do I pay tax in Nigeria and Canada when I sell property in Nigeria?
Both can tax the gain under their own laws. Canada then gives a foreign tax credit for Nigerian tax paid, up to the Canadian tax on that gain.
Is there a tax treaty between Canada and Nigeria?
Yes. It was signed on 4 August 1992 and has been in force since 16 November 1999.
How much of my gain is taxed in Canada?
The CRA describes the capital gains inclusion rate as generally one-half, applied to the Canadian-dollar gain.
What if Nigerian tax is higher than Canadian tax?
The credit is capped at the Canadian tax on that income, and unused non-business foreign tax credit is not carried to other years.
Sources
- Publications.gc.ca: Canada–Nigeria agreement on avoiding double taxation on income and capital gains (signed 4 Aug 1992, in force 16 Nov 1999, Treaty Series 1999/48) · accessed Oct 2026
- PwC Nigeria: Capital gains tax reforms 2026 · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, individual significant developments (reviewed 29 May 2026) · accessed Oct 2026
- CRA guide T4037, Capital Gains (modified 11 Feb 2026) · accessed Oct 2026
- CRA Income Tax Folio S5-F2-C1, Foreign Tax Credit (modified 31 Mar 2026) · accessed Oct 2026
- CRA guide T4131, Canadian Residents Abroad (Rev. 12, copy hosted by CCH) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.