State gives tax relief to boost home ownership

Business Daily Kenya:  Housing co-operatives are set to enjoy tax relief in the current financial year to enable them to increase supply of...

Business Daily Kenya: 

Taxation. Photo/Courtesy

Housing co-operatives are set to enjoy tax relief in the current financial year to enable them to increase supply of units mainly to middle- and lower-income areas. President Uhuru Kenyatta said the government has extended to the co-operatives mortgage tax relief and real estate development corporate tax.

The new tax measures, he said, are designed to influence and encourage further growth and development of the housing sector. He observed that housing co-operatives have contributed to provision of affordable and decent housing especially for the middle- and lower-income segments of the population.

“In order to further encourage the growth and development of the housing sector through co-operatives, my government has, through the Miscellaneous Amendment Bill 2017, granted various privileges to the housing sub-sector,” said President Uhuru.

He made the remarks in a speech read on his behalf by Industry, Trade and Co-operatives Cabinet Secretary Adan Mohamed during the National Ushirika Day Celebrations at Uhuru Park.

The President observed that savings and credit co-operatives (Saccos) have mobilised savings to the tune of Sh600 billion with an asset base in excess of Sh800 billion. He said the saving mobilisation model has helped financial deepening right down to the hitherto unbanked segments of the population.

Uhuru said members who borrow from saccos will now enjoy mortgage tax relief as is the case in other mortgage institutions such as banks and building societies.

“Threshold for real estate development entitlement for the 15 per cent corporate relief has been lowered from 400 units to 100 units so as to enable co-operatives to benefit from the new measure,” he added.

According to Vision 2030, the local housing sector is characterised by inadequate affordable and decent housing, low- level of urban home ownership and extensive and inappropriate dwellings including slums and squatter settlements.

It is estimated that out of total 150,000 housing units required annually in urban areas, only an estimated 35,000 are produced. In the rural areas it is estimated that there is a need to improve the quality of over 300,000 housing units every year.

This is attributed to low investment in low- and middle-cost housing by both public and private sectors. Uhuru said most societies under the umbrella of National Housing Co-operative Union are involved in provision of affordable houses to the middle and lower income earners across the country.

Within the central business district and other major urban centres, cooperatives own substantial commercial buildings while in the estates the sector is taking lead in residential housing provision.

The post State gives tax relief to boost home ownership appeared first on Mediamax Network Limited.

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