Personal Income Tax (PIT) Savings Option Part 2: National Housing Fund (NHF) – Jennifer Ezediaro


In the first part of this series; ‘How to Reduce Your Personal Income Tax (PIT) Liabilities: The Voluntary Pension Contribution (VPC) Option!’ we discussed how Voluntary Pension Contribution (VPC) can be a Personal Income Tax (PIT) savings option as it is a tax-deductible contribution. We also went further to explain the benefits of making the VPC to the contributor and how to contribute. In today’s piece, we will be looking at another Personal Income Tax savings option: National Housing Fund (NHF).

The National Housing Fund as A Tax-Deductible Contribution

The National Housing Fund (“NHF or the Fund”) is a scheme created by the Federal Government in 1992, to which self-employed persons and employees in both the private and public sectors are expected to contribute 2.5% of their monthly basic salary to the Federal Mortgage Bank of Nigeria. The NHF Act was established in 1992, specifically, Section 3 of the Act provides the establishment of the Act.

Section 23 of the Act also provides that contributions and any refund of any contribution made to the Fund shall be exempted from payment of income tax. This, in turn, reduces the tax payable by the contributor.

Benefits of contributing to the National Housing Fund

Contributing to the Fund is compulsory and failure to contribute may lead to penalties, with a self-employed liable to pay a fine of ₦ 100,000 or imprisonment for a term of one year or both. However, there are benefits to contributing to the Fund.

Contributors to the Fund are eligible to assess housing loans of up to ₦ 15,000,000 at a low-interest rate at 6% per annum with a long repayment period of up to 30 years.

Also, Section 17 of the Act provides that any contributor who has not obtained a housing loan from the bank shall be eligible to a refund of their contribution within three months of the application. Conditions to be eligible for this refund are as follows;

i) Refund is made to a contributor who has attained 60 years of age or has put in 35 years in service.

 ii) Refund is also made to a contributor that has obtained a loan, liquidated the loan and has attained the age of 60 years or have put in 35 years in service.

iii) Refund is made to a contributor retired from employment and becomes incapable of continuing the contribution to the Fund.

For applicants from the underlisted professions, the retirement ages are as stated     below:

  • Professors, Judges and Medical Consultants – 70 years of age
  • Academic, Non-Academic Staff, Judicial Staff – 65 years of age
  • Military Officers – 62 years of age

 iv) Refund is made to the next-of-kin of a contributor in case of a deceased contributor.


Avoiding the penalties should not be the only reason to make contributions to the scheme; there are other benefits to making contributions which include: reducing tax liability, assessing housing loan and enjoying lower rate of interest for housing loans. 

For more enquiries, please contact: Jennifer Ezediaro (j.ezediaro@localhost, +234 906 346 3140).

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