Airbnb Regulation in Nigeria: Gaps and Economic Impact in 2025

Mercy Idoko IfunanyaAugust 24, 202502.2K views

According to a 2024 Lagos Short-let Market report by Edala Homes, using data from AirDNA and its research, short-let rentals in Lagos pulled in ₦264.3 billion. By 2025, that figure could climb close to ₦300 billion.

The numbers sound exciting, but they also raise challenging questions. The truth is, Airbnb regulation in Nigeria is still unclear. Hosts earn millions, travellers enjoy cheaper stays, and investors rush into the market

Yet, many don’t know the rules. This piece looks at the gaps in Nigeria’s short-let system and how zoning, taxes, and weak laws affect both hosts and renters.

Defining Nigeria’s Short-Let Market Size

In mid-2025, Airbtics data shows there are 1,394 active Airbnb listings in Lagos, with an average daily rate of $67 and a 45% occupancy rate. Most listings bring in around $10,000 per year.

Another insight: short-let apartment prices in Lagos jumped over 200% in 2024. Some neighbourhoods like Ikoyi surged nearly 60%.

The average daily rate in Lagos short-lets was around $66 (about ₦60,000) in 2024, with occupancy at 44%, according to AirDNA data cited in the same report. Many hosts earned as much as $10,000 (₦9 million) a year from just one property.

This shows two things. First, short-lets are no longer a side hustle. They are now a serious business for property owners. Second, the money at stake makes clear why Airbnb regulation in Nigeria matters.

Lagos is not the only city in the game. Abuja, Port Harcourt, and Ibadan also have rising numbers of short-let apartments. These are primarily in high-demand neighbourhoods close to business hubs, airports, and tourist areas.

With billions flowing through the market, unclear rules will affect not only hosts but the entire economy.

Legal & Regulatory Gaps (Zoning + Tax)

There is no single national short-let law. States set most rules. Nigeria’s Supreme Court said states (not the FG) control hotel licensing in 2013.

Lagos Treats Short-Lets Like Hotels. The 2009 Hotel Occupancy & Restaurant Consumption (HORC) Law charges 5% consumption tax on hotels, guest houses, and apartments for short-term letting.

Tax Compliance Is Mandatory. LIRS reminds operators to charge and remit monthly under the HORC Law. Penalties apply if you do not file. VAT also applies. FIRS says payments for hotel accommodation and short stay (sublets) are liable to 7.5% VAT. Airbnb also applies 7.5% VAT to its service fees for customers in Nigeria.

Lagos’ Tourism Promotion Agency Law (2019) defines a “tourism establishment” to include places offering accommodation for less than one month. This can capture many short lets.

Zoning and Use Approvals. To change a building’s use, owners may need planning approval from LASPPPA under the Physical Planning Permit Regulations 2019 and the state planning law.

Lagos has also warned against converting homes to commercial use without approval. Enforcement drives have targeted such changes.

You can face two different taxes (5% consumption tax plus 7.5% VAT). You may also need tourism registration and, in some cases, change-of-use permits. But processes are not unified, and rules vary by state.

Nigeria lacks a nationwide registry or a single permit path for short lets. This creates confusion and uneven enforcement across cities.

Global Comparison: Airbnb Regulation in Other Countries

Nigeria’s rules are still unclear and patchy. But in many other countries, short-let laws are now stringent.

United States: Cities like New York only allow Airbnb if the host lives in the unit and no more than two guests stay at a time. Hosts also must register with the city before they can list online. This was made stricter in September 2023 after years of complaints about housing shortages.

France: Paris, the world’s busiest Airbnb city, limits short-term rentals of a primary home to 120 nights a year. Anything longer must be registered as commercial property. Fines can reach €50,000 for breaking the rule.

Spain: In Barcelona, landlords need a tourist licence before renting on platforms like Airbnb. The city has been banning new permits since 2014 to stop overtourism and protect housing supply.

United Kingdom: London has a 90-night cap per year on short-term rentals unless the host gets planning permission. Airbnb now automatically blocks listings that try to exceed this cap.

Compared to Nigeria, other countries use a mix of caps, licences, and strict enforcement. The focus is to protect housing for locals, control tourism, and collect taxes smoothly.

Nigeria has some tax rules (Lagos HORC tax, VAT), but no clear national framework or limits like those abroad.

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Economic Impact Of Airbnb In Nigeria

Airbnb is not just about travellers and hosts. It has a real effect on jobs, local income, and even housing costs. Let’s break it down.

1. More Income For Hosts

Many Nigerians earn extra money by renting out spare rooms or apartments. For some, this side income pays school fees or covers daily bills.

In Lagos, hosts often say Airbnb gives them steadier earnings than traditional rent.

2. Boost For Local Businesses

Guests don’t just stay indoors. They eat in nearby restaurants, buy and eat Nigerian street food from local markets, and use taxis.

This spending spreads money across the community and supports small business owners.

3. Jobs For Service Providers

Short-let apartments need cleaners, drivers, and maintenance workers. This has created new job opportunities, especially for young people in cities like Abuja and Port Harcourt.

4. Tax Revenue For the Government

Where rules exist, like Lagos’ Hotel Occupancy and Restaurant Consumption (HORC) tax, Airbnb helps the government collect revenue.

But because national regulation is weak, Nigeria may still be losing billions in untapped taxes.

5. Rising Housing Costs

On the downside, Airbnb has been linked to higher rents. Landlords often prefer short-term guests who pay more per night, leaving fewer affordable homes for locals.

This has already been seen in parts of Lagos Island.

6. Housing Costs Rise and Homes Shrink

Many landlords switch their properties from long-term rentals to short-term rentals. These earn more per night.

But that shrinks the pool of homes that regular folks can rent long-term. This has pushed rent and housing prices up in places like Lagos.

7. Innovation with Caution

Some developers suggest short-lets could offer flexible, temporary housing in cities like Lagos, Abuja, and Port Harcourt. This can help, especially during housing crises.

But it only works if done in a planned, balanced way, so long-term homes remain available too.

Conclusion

Airbnb regulation in Nigeria is still catching up with the fast growth of short-let rentals. While the sector supports tourism and income for hosts, it also brings housing and tax concerns.

Clear rules can help Nigeria enjoy the benefits while reducing the risks.

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FAQs

1. Is Airbnb Legal In Nigeria?

Yes, Airbnb is legal in Nigeria, but local councils in cities like Lagos and Abuja may add rules for safety, taxation, or zoning.

2. How Much Can A Host Earn On Airbnb In Nigeria?

Earnings vary by location and property. In high-demand areas like Lekki, Lagos, some hosts earn two to three times more than traditional rents.

3. Does Airbnb Make Housing More Expensive In Nigeria?

Yes, studies and market data show short-term rentals reduce the supply of long-term rentals, pushing rent prices higher in urban centres.

4. What Are The Main Benefits Of Airbnb For Nigeria’s Economy?

Airbnb boosts tourism, creates jobs, increases tax revenue, and helps local businesses like restaurants and transport services.

5. Can Short-Lets Solve Nigeria’s Housing Shortage?

No, short-lets can provide temporary relief, but they do not solve the long-term housing deficit. They may worsen it if unregulated.