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The short answer
Both countries can tax the sale. Since 1 January 2026, Nigeria adds an individual's chargeable gain to total income and taxes it at personal income tax rates of up to 25%, with no indexation and a one-time exemption for a principal private residence. The US taxes a citizen or resident on the gain worked out in dollars, using exchange rates on the purchase and sale dates, reported on Form 8949 and Schedule D. Nigerian tax paid may be creditable on Form 1116, but there is no US-Nigeria tax treaty.
The Nigerian side under the Nigeria Tax Act 2025
The old flat 10% capital gains tax for individuals is gone. As Bloomberg Tax (February 2026) and PwC's Nigeria summary (reviewed May 2026) describe the new rules:
- Chargeable gains are added to total income and taxed at progressive personal income tax rates, up to 25%.
- Gain = disposal proceeds less acquisition cost, enhancement expenditure and incidental costs of buying and selling (legal, valuation, agency, advertising, stamp duty).
- Interest on a loan used to buy the asset is not deductible, and there is no indexation for inflation.
- Capital losses cannot be set against other gains.
- A principal private residence, with up to one acre of adjoining land, is exempt once in a lifetime.
- Land and buildings are chargeable assets.
Non-residents are taxed on income derived from Nigeria (Mondaq, January 2026), and a gain on Nigerian land is plainly Nigerian-source. Which authority assesses and collects from a non-resident individual, and how, is not set out on the pages we read; your Nigerian lawyer or tax adviser should confirm before completion. The Nigeria-side detail is in capital gains tax under the Nigeria Tax Act 2025.
Worked example: Nigerian tax (illustrative)
Bought for ₦55,000,000, sold for ₦120,000,000, with ₦5,000,000 of allowable selling costs: gain ₦60,000,000. Using the 2026 bands reported by PaySpace (first ₦800,000 at 0%, next ₦2,200,000 at 15%, next ₦9,000,000 at 18%, next ₦13,000,000 at 21%, next ₦25,000,000 at 23%, above ₦50,000,000 at 25%) and assuming no other Nigerian income or reliefs:
| Band | Tax |
|---|---|
| ₦800,000 at 0% | ₦0 |
| ₦2,200,000 at 15% | ₦330,000 |
| ₦9,000,000 at 18% | ₦1,620,000 |
| ₦13,000,000 at 21% | ₦2,730,000 |
| ₦25,000,000 at 23% | ₦5,750,000 |
| ₦10,000,000 at 25% | ₦2,500,000 |
| Total on ₦60,000,000 | ₦12,930,000 |
This is an example to show the mechanics, not an assessment; confirm how bands apply to a non-resident's gain with a Nigerian adviser.
The US side
For a US citizen or resident, worldwide income is generally taxable (IRS Publication 54). IRS Topic 409 treats property held for investment as a capital asset; held more than one year, the gain is long-term. Sales go on Form 8949 and then Schedule D. For 2025, the long-term rates were 0%, 15% and 20%, with the 0% band up to $48,350 for single filers and $96,700 for joint filers; check the current year's thresholds. If the property was rented and you claimed depreciation, the part of the gain from that depreciation (unrecaptured section 1250 gain) is taxed at up to 25%.
Dollars, not naira
The IRS wants every amount in US dollars, converted at the rate prevailing when it was paid or received; it has no official rate but expects you to use one consistently. Your cost is converted at the rate on the purchase date, and the proceeds at the rate on the sale date. When the naira has weakened a lot, a large naira gain can be a small dollar gain, or a dollar loss.
Worked example: same sale in dollars (illustrative rates)
The ₦55,000,000 purchase cost at an example purchase-date rate of ₦360 to $1 is $152,778. Proceeds of ₦120,000,000 less ₦5,000,000 selling costs, ₦115,000,000, at an example sale-date rate of ₦1,500 is $76,667. The US result is a capital loss of about $76,111, while Nigeria taxes a ₦60,000,000 gain. Capital losses beyond gains are deductible only up to $3,000 a year ($1,500 married filing separately), with the rest carried forward, per Topic 409. Rates are examples, not historical quotes.
Credit for Nigerian tax
The IRS foreign tax credit (Form 1116) is for foreign income taxes on income also taxed by the US, and it is limited to the US tax on your foreign-source income. Since Nigeria now taxes the gain as income at personal rates, it is the kind of tax the credit is designed for, but in the example above there is no US tax on the sale to offset, so the Nigerian tax may give no current US benefit; unused credits can be carried back one year and forward ten. There is no US income tax treaty with Nigeria on the IRS list, so no treaty rule decides which country taxes first.
Records to pull together before you sell
- Purchase documents and receipts, with the naira amount and date of each payment.
- Receipts for improvements (enhancement expenditure) and for legal, survey and perfection costs.
- Depreciation claimed on US returns if it was rented.
- Sale agreement, agency invoice and receipt for proceeds.
- Exchange rates used for each date, and the source.
Getting the money out is covered in bringing proceeds of a Nigerian property sale to the US, and inherited property in stepped-up basis on inherited Nigerian property.
Where Pryme fits
Sale proceeds arrive in naira. A Pryme account opened from the US can receive them on local naira details, hold them, and convert to dollars when you choose with Swap, showing the rate and fee before you approve. The conversion confirmation gives you a dated rate for your records, and verifiable statements are available through VerifyDoc.ai (receipts). See multicurrency accounts.
Questions people ask
Do I pay capital gains tax in Nigeria if I live in the US?
Yes, a gain on Nigerian land is Nigerian-source. Since 2026 it is added to income and taxed at personal income tax rates up to 25%.
Is the Nigerian CGT still 10%?
No, not for individuals. The Nigeria Tax Act 2025 replaced the flat 10% with personal income tax rates from 1 January 2026.
Do I report the sale of Nigerian property to the IRS?
Yes, if you are a US citizen or resident. Report it on Form 8949 and Schedule D, in dollars.
Can I claim the Nigerian tax against my US tax?
Possibly, through the foreign tax credit on Form 1116, limited to the US tax on the foreign-source income. There is no US-Nigeria treaty.
Sources
- Bloomberg Tax (Adegbola Thomas): New Nigeria tax law redefines capital gains tax for individuals (2 Feb 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, individual income determination (reviewed 29 May 2026) · accessed Oct 2026
- PaySpace: Nigeria tax reform 2026, PIT bands (19 Nov 2025) · accessed Oct 2026
- IRS: Topic no. 409, Capital gains and losses (reviewed 24 Sep 2026) · accessed Oct 2026
- IRS: Foreign currency and currency exchange rates (updated 22 May 2026) · accessed Oct 2026
- IRS: Foreign tax credit, how to figure the credit (reviewed 9 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.