REAL ESTATE FISCAL POLICY OPTIONS AND DEVELOPERS' INVESTMENT DECISIONS IN ABUJA, NIGERIA: EVIDENCE FROM SIMULATED DATA

Abstract

Property development links housing delivery, job creation, capital formation and the physical growth of cities. How far that potential is realised depends partly on the fiscal terms under which developers operate. In Abuja, demand for residential, commercial and institutional space has remained strong, yet developers must contend with layered taxes, development levies and administrative procedures. The design and application of fiscal policy therefore carry direct weight for investment behaviour. This paper investigates how property taxation, capital gains tax, development charges, compliance costs, tax incentives and fiscal predictability relate to the investment decisions of property developers operating in Abuja. A cross-sectional quantitative design was applied to a simulated dataset of 300 developer-respondents. The dataset was constructed to illustrate the empirical model proposed for this line of enquiry, so the figures reported should be read as a demonstration of the analytical structure rather than as confirmed field results. Descriptive statistics, Pearson correlation and multiple regression were used to interrogate the data, while diagnostic tests for normality, serial correlation and heteroscedasticity were conducted to confirm the suitability of the model. Developers rated compliance costs and development charges more strongly than the other fiscal issues. The regression model reached statistical significance (F = 79.55; p < 0.001) and accounted for 62.0 percent of the variance in investment decisions. Property taxation, capital gains tax, development charges and compliance costs were each negatively associated with investment decisions, whereas tax incentives and fiscal predictability showed positive associations. A fiscal regime intended to support rather than undercut property investment must therefore combine revenue collection with lighter administrative burdens, well-targeted incentives, dependable rules and clearer communication of how revenue is used.