First Time Homebuyers to Get 4 Percent Tax Reprieve to Improve Home Ownership
President
William Ruto has announced plans to exempt all first-time home buyers from
paying stamp duty, in an effort to reduce housing costs for workers struggling
with rising living costs and largely stagnant pay.
Dr.
Ruto stated that his administration would seek revenue balance by eliminating
stamp duty for first-time homeowners and increasing compliance with other
property-related levies such as land rates and rent.
Following
changes to the law made by the previous administration, the stamp duty
exemption now applies to first-time homebuyers of approved affordable housing
units.
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Family Loses In Multibillion Fourways Junction Suit
“We
have said as a government that if you are buying a house for the first time, we
can’t tax you. We’ll remove stamp duty. But when we remove stamp duty [for the
first-time homebuyers], you should pay land rates because if you don’t where
will we get funds for water supply, road construction, electricity connection
and garbage collection?” posed Dr Ruto.
Stamp
duty is charged on the market value of the property at a rate of 4% in towns
and 2% in rural areas, and it must be paid to the taxman within 30 days of
contract execution to avoid penalties.
Read: Stamp
Duty Payment For Real Estate Transactions In Kenya
The
elimination of stamp duty is one way aimed at helping ease the cost of house
ownership. For example, a family buying a Sh5 million house in Nairobi parts
with Sh200,000 as stamp duty costs. The new administration has set sights on
putting up 200,000 units in the first year.