10 things you need to know about the revised National Housing Fund that may reduce your salary by 2.5% monthly

The revised National Housing Fund (NHF) was recently passed by the National Assembly and awaiting presidential assent to repeal the 1992 NHF Act.

Th revised National Housing Fund in Nigeria

The revised bill, National Housing Fund (Establishment) Act 2018, allows individuals earning from the minimum wage mark to contribute 2.5% of their monthly income while commercial or merchant banks contribute 10% annual profit before tax to a poll for affordable housing building.

The revised version also introduced a 2.5% tax on every bag of cement, meaning, you pay more to buy a bag of cement and contribute more - just because you want to build an affordable home.

Under the extant NHF law (NHF 1992), every Nigerian earning N3,000 or more per annum is required to contribute 2.5% of their monthly basic salary to the NHF. The funds mobilised will be made available to contributors at affordable interest rates to build homes.

Just like the pension and personal income tax contributions, the NHF is compulsory for a public worker, a private worker or self-employed individuals earning pay from the range of minimum wage and above.


What are the key highlights of the proposed fund?

  • Mandatory 2.5% contribution of monthly income by employees earning minimum wage and above in public and private sectors as well as self-employed individuals.
  • 2.5% on locally produced or imported cement.
  • Employers are to deduct and remit the contributions monthly
  • Penalty for non-compliance of up to N100 million for corporates and N10m for individuals while sanctions include cancellation of operating licence of banks, insurance companies and PFAs for violations.
  • Withdrawal by contributors who have attained the age of 60 years or 35 years of service to be an interest rate of 2% per annum. The Fund and any refund of contributions are exempted from payment of taxes.

Why are people making noise about it now?

  • Although the Fund is not new, many have faulted why the revised is coming without the input of various stakeholders. The NHF Act of 1992 failed because many organisations including government-owned enterprises failed to make a contribution to the poll.
  • There were also alleged poor record keeping by the Federal Mortgage Bank of Nigeria (FMBN), the authority charged for the sole responsibility and the cumbersome bureaucratic bottlenecks of getting a loan from it.
  • Another shortcoming of the revised bill was its inadequacies to touch on the shortcomings of the 1992 Act on the issue of land ownership and titles as well as the current Land Use Act. The NHF loan is merely for the construction of the building without the acquisition of the landed properties.

What is the cost implication on earners?

  • The cost implication for income earners is that it will take 2.5% from your income every month which is the equivalent of 250% from the PAYE contribution.

Meaning: A N30,000 earner will pay 2.5% (N750) every month to a poll account on the provision of affordable housing for the population.

  • It will increase the price of cement as the revised bill introduced a 2.5% tax on a bag of cement.
  • It will also take 10% away from commercial or merchant bank profit before tax (PBT) in every accounting year.


In April 2019, President Muhammadu Buhari declined assent to the Bill due to multiple levies which the Bill seeks to impose on certain products and financial constraints on Nigerian workers. 

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