Great News for Lagos Residents: Tax Relief Package Unveiled for 2026!
The Lagos Council is stepping up its support for local families and businesses next year, having unanimously approved a new fiscal package aimed at easing the burden of the rising cost of living. While this comprehensive package still requires final deliberation and approval by the Municipal Assembly (set for November 24th), the executive’s decision highlights a commitment to mitigating current costs through significant tax relief.
Here is a breakdown of the key measures set to benefit Lagos residents and entrepreneurs in 2026.
Relief for Homeowners and Families (IMI – Council Property Tax)
The local authority is maintaining several key supports regarding the Municipal Property Tax (IMI):
- Minimum Rate Maintained: The IMI rate for urban properties will remain at the lowest legal threshold of 0.3%. The rate for rural properties remains fixed at 0.8%.
- Support for Rental Housing: If you own urban properties rented out for permanent habitation, you will benefit from a 20% reduction on the applicable IMI rate, provided the contracts are registered with the tax authorities for the year the benefit is claimed.
- Discounts for Dependents: Families with dependents registered at their fiscal domicile in Lagos will automatically receive an IMI reduction based on the size of their family:
- One dependent: a fixed reduction of €30.
- Two dependents: a fixed reduction of €70.
- Three or more dependents: a fixed reduction of €140.
- It is projected that approximately 2,300 families will see their IMI reduced due to this decision.
- Extending Exemptions: The exemption from IMI, previously introduced in 2025, will be extended for an additional two years under the terms of the Tax Benefit Statute. This measure allows eligible property holders to postpone the start of their IMI payment.
- Incentives for Rehabilitation: Properties undergoing intervention in the City’s Urban Rehabilitation Area will see a 30% reduction in their IMI rate (for licences issued between 1 December 2024 and 30 November 2025).
- Penalties for Neglect: Conversely, owners of properties considered vacant for over a year or those classified as ruins will face a tripling of the IMI rate.
A Boost to Personal Income (IRS Participation)
One of the most significant measures involves Personal Income Tax (IRS):
The Council has decided to continue not applying the variable participation rate of up to 5% on the IRS. This corresponds to the Council waiving its entire potential share of the 2026 income tax receipts (which would typically be collected in 2027).
In real terms, this is excellent news for local residents: because the municipality forgoes its participation, taxpayers residing in Lagos pay 5% less IRS. This is equivalent to foregone revenue of over one million euros for the municipality, directly translating into increased disposable income for local contributors.
Supporting Local Businesses
The policy of supporting companies, families, and institutions through tax relief is continuing, particularly focusing on entrepreneurial support:
- No Corporate Surcharge (Derrama): Following a trend established since 2022, the Council will not propose the levying and collection of the municipal surcharge (Derrama) on the taxable profit of companies subject to Corporate Income Tax (IRC) in 2026. This waiver represents an estimated €2.1 million in revenue that the municipality is forfeiting to support local enterprise.
- Right of Way Fee: The Municipal Fee for Right of Way (Taxa Municipal de Direitos de Passagem – TMDP) applied to operators of electronic communications networks and services accessible to the public has been approved for continuity, fixed at 0.25%.
These measures collectively reinforce the Council’s commitment to easing the financial pressure on the community in the coming year.
