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The short answer
The simplest set-up is for your tenant or agent to pay rent into a naira account in your name in Nigeria, with a written tenancy and a receipt for every payment. The rent is Nigerian-source income, so Nigerian tax rules apply to it, and as a US citizen or resident it is also part of the worldwide income you report to the IRS. You can leave it in naira for costs at home or convert it later through an authorised channel.
Where the rent should land
Nigerian tenants usually pay rent yearly or every two years in advance, by bank transfer to the landlord or the landlord’s agent. When you live in the US, the cleanest arrangement is a naira account in your own name, not a relative’s. It gives you a clear record of what was paid and when, it keeps the money out of family disputes, and it is the account your bank and any tax office will expect to see. If you do not already have one, Nigerian banks run diaspora account processes for people living abroad (see our guide to opening a Nigerian account from the US with your BVN).
Three common set-ups, and what each costs you in control:
| Set-up | How it works | Watch for |
|---|---|---|
| Tenant pays you directly | Tenant transfers to your naira account; you send a receipt | You chase late payment yourself, from a different time zone |
| Agent collects, then pays you | Estate agent or property manager collects and remits after their fee | Get the agency agreement in writing, with the fee, the remittance date and statements |
| Relative collects | A family member receives the rent and passes it on | No paper trail; the money sits in someone else’s name |
Whichever you choose, put the tenancy in writing, state the account the rent must be paid into, and issue a receipt for each payment. A dated receipt protects you and the tenant if there is ever a dispute; our Nigeria library has a rent receipt template you can adapt.
Tax on the Nigerian side
Living in the US usually makes you a non-resident for Nigerian tax, but that does not take the rent out of Nigerian tax. PwC’s Nigeria summary (last reviewed 29 May 2026) says non-residents are taxed only on Nigerian-sourced income, and rent from a property in Nigeria is Nigerian-sourced. Residence tests are broad, though: the same PwC summary lists domicile, habitual abode, family or economic ties and 183 days or more of presence, so long visits home or a family base in Nigeria can change the answer.
Withholding tax is the part landlords meet first. The Deduction of Tax at Source (Withholding) Regulations 2024, in force from 1 July 2024, set the rate on rent at 10% across categories of recipient. In practice it is deducted when the tenant is a company or other body required to deduct; the tenant pays you the net amount and remits the tax. Ask for the withholding tax receipt or credit note each time, because it is your evidence that tax was paid on your behalf.
Worked example (illustrative figures)
- Annual rent agreed: ₦4,800,000, tenant is a company.
- Withholding tax at 10%: ₦480,000, remitted by the tenant.
- Paid into your account: ₦4,320,000, plus a credit note for ₦480,000.
- If you later convert the net rent at an example rate of ₦1,350 to $1: ₦4,320,000 ÷ 1,350 = $3,200 before any conversion fee.
Tax on the US side
IRS Publication 54 (revised December 2025) states that a US citizen or resident alien’s worldwide income is generally subject to US income tax, wherever they live. Nigerian rent therefore belongs on your US return, converted into US dollars, because Publication 54 also requires amounts on the return to be expressed in dollars. Rental expenses and depreciation rules for foreign property have their own treatment; a US preparer who handles foreign property is worth paying for.
Two points stop the same rent being taxed twice in full. First, the IRS foreign tax credit page (updated 9 July 2026) allows individuals who paid foreign income taxes on income also taxed in the US to claim a credit on Form 1116, or an itemised deduction instead; it notes that only income-type taxes qualify and that the amount withheld is not always the amount that qualifies. Second, there is no US–Nigeria income tax treaty: Nigeria does not appear on the IRS list of US income tax treaties (updated 3 January 2026), so there is no treaty rate to rely on and the credit is the main relief.
Holding the rent in a Nigerian account also brings a reporting duty. The IRS FBAR page says US persons whose foreign accounts together exceeded $10,000 at any time in the calendar year file FinCEN Form 114, separately from the tax return, due 15 April with an automatic extension to 15 October. A year’s Lagos rent can pass that figure on the day it arrives. This is information, not tax advice.
Moving the money later
Rent arrives in naira. You can spend it in Nigeria (repairs, service charge, school fees for family), keep it, or convert it. Converting naira into dollars and sending them abroad goes through an authorised dealer bank and its documentation; the CBN Foreign Exchange Manual 2026, as summarised by Pavestones in June 2026, eased some rules for holders of self-funded domiciliary accounts, so ask your bank which route and which documents apply to rental income. Keep the tenancy, receipts and withholding notes together, because a bank asking about the source of funds will want them.
Steps
- Open or confirm a naira account in your own name and put its details in the tenancy.
- Agree in writing whether the tenant or an agent pays, the due date and the fee if an agent is used.
- Collect a receipt trail and any withholding tax credit notes.
- Report the rent in dollars on your US return and keep evidence of Nigerian tax paid for the foreign tax credit.
- Check whether your Nigerian balances crossed the FBAR threshold during the year.
Where Pryme fits
A Pryme Personal Account can be opened from the US and holds naira alongside dollars, pounds and euros, each with its own account details, so a tenant can pay rent to naira details in your name. The naira stays naira until you decide; Swap converts it when you choose, and the app shows the rate and the fee before you approve. Naira deposits are held by a licensed Nigerian microfinance bank, and you can issue verifiable receipts for each payment through our partner VerifyDoc.ai. See how the multicurrency account works.
Questions people ask
Do I pay Nigerian tax on rent if I live in America?
Generally yes. Non-residents are taxed in Nigeria on Nigerian-sourced income, and rent from Nigerian property is Nigerian-sourced. Where withholding applies, the 2024 Regulations set the rate on rent at 10%.
Do I report Nigerian rent to the IRS?
If you are a US citizen or resident, yes. Publication 54 says worldwide income is generally subject to US tax. You may be able to claim a foreign tax credit for Nigerian income tax paid.
Can my tenant pay rent into my mum’s account?
They can, but the money is then legally in her name and there is no clean record of your income. An account in your own name is safer for you, the tenant and any tax review.
Is there a US Nigeria tax treaty for rental income?
No. Nigeria is not on the IRS list of US income tax treaties, so relief for double taxation comes mainly through the foreign tax credit.
Sources
- PwC Worldwide Tax Summaries: Nigeria, Individual (last reviewed 29 May 2026) · accessed Oct 2026
- PwC Nigeria: Highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · accessed Oct 2026
- IRS Publication 54 (12/2025): Tax Guide for U.S. Citizens and Resident Aliens Abroad · accessed Oct 2026
- IRS: Foreign Tax Credit (updated 9 Jul 2026) · accessed Oct 2026
- IRS: United States income tax treaties A to Z (updated 3 Jan 2026) · accessed Oct 2026
- IRS: Report of Foreign Bank and Financial Accounts (FBAR) (reviewed 30 Jul 2026) · 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.