President Ruto to scrap stamp duty for first-time home purchasers – Business Daily
A house under construction. FILE PHOTO | NMG
President William Ruto has announced plans to exempt first-time home buyers from paying stamp duty to all in a bid to ease house ownership costs among workers battling the rising cost of living amid largely stagnant pay.
Dr Ruto said his administration would seek to strike a revenue balance by removing stamp duty for first-time homeowners and raising compliance for other property-related levies like land rates and rent.
Currently, the exemption from stamp duty applies to first-time homebuyers of approved affordable housing units following changes to the law made by the previous administration.
Read: Taxes on land, house sales hit Sh12.5bn in nine months
“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.
The stamp duty is charged on the market value of the property at the rate of four percent in towns and two per cent in rural areas, and should be paid to the taxman within 30 days of contract execution to avoid penalties.
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.
→ [email protected]
