Up to two private vehicles a year are exempt. Beyond that, the gain is taxed at the PIT bands.
CGT due
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Exemption status
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Net gain after CGT
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Two free disposals, then the bands bite
Most people who sell a personal car in Nigeria owe nothing, and this tool exists to confirm that quickly and to flag the case where you do. The reform now in force keeps a per-year exemption for private vehicles: as modelled here, gains on up to two private, non-commercial vehicles disposed of in the same year are exempt from capital gains tax. Sell one car, or even two, and the answer is zero. The exemption is counted by the number of disposals in the year, not by the size of the gain, which is why the calculator asks how many private vehicles you have sold rather than starting with the money.
It is the third disposal and beyond that changes the picture. There is no longer a flat capital gains tax rate in Nigeria. For an individual, a taxable gain folds into your chargeable income for the year and is taxed at the personal income tax bands. That is the structure to hold on to. The specific bands and the two-vehicle figure are what this calculator applies under the reform, and both should be confirmed with your State Internal Revenue Service, since personal income tax and the gains that now sit inside it are administered at state level.
Selling a third car on top of a salary
Here is the case that actually produces a bill. Set the number of private vehicles sold this year to 3, the gain on this sale to NGN 3 million, and other chargeable income to NGN 6 million. Because this is the third disposal, it falls outside the two-vehicle exemption, so the gain is taxable. The tool stacks the NGN 3 million gain on top of your NGN 6 million of income and taxes the slice it adds. With NGN 6 million already taking you into the 18 percent layer, the extra NGN 3 million is taxed at 18 percent, producing NGN 540,000 of capital gains tax and leaving a net gain of NGN 2,460,000.
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Why the gain is taxed at your top slice
The single most useful thing to understand here is that a taxable car gain is charged at your marginal rate, not some fixed percentage. The calculator works it out the honest way: it computes your tax with the gain included, computes it without, and the difference is the CGT. That means the same NGN 3 million gain costs more if your other income already sits in a higher band, and less if your income is low. Someone with modest earnings might see part of the gain fall in the 15 percent layer; a high earner could see it taxed at 21 percent or above. This is why the "other chargeable income" field matters so much. Get it roughly right, because it sets the rate the gain is charged at.
Private versus commercial, and other traps
A few edge cases are worth knowing. The exemption is for private, non-commercial vehicles, so a taxi, a delivery van, or a car held as trading stock by a dealer does not qualify and is handled under different rules. The count resets each year, so timing a third sale into January rather than December can keep it inside a fresh year's two-vehicle allowance. And the figure that matters is the gain, not the sale price: for everyday cars that depreciate, there is often no gain at all, which is the real reason most private sales are untaxed. This tool assumes you have already worked out a positive gain. If you sold for less than you paid, there is nothing to tax. As always with the reform in transition, confirm the current treatment with your State Internal Revenue Service.
Does each vehicle get its own exemption, or the pair together?
The allowance covers up to two private vehicles across the whole year, not two per car in isolation. The first and second disposals are exempt; the third onward is where the calculator starts taxing the gain. Enter the running count for the year so the tool knows which disposal this one is.
I sold my car at a loss. Do I still report it?
If there is no gain, there is no capital gains tax, and the calculator will show zero once you enter a gain of nil. Record-keeping is still sensible, especially if you sell vehicles regularly, so you can show the State Internal Revenue Service how you arrived at the figures if asked. Keep the purchase and sale evidence either way.