NAIROBI, Kenya, May 28 – Kenya Commercial Bank’s (KCB) Mortgage arm S&L is proposing that the government reduces stamp duty for first time home owners.
Currently, stamp duty stands at two to four percent depending on the property’s location; a rate that the lender Savings & Loans (S&L) reckons is too high.
“Such a move would greatly reduce the burden for those interested in committing themselves to own a home for the first time,” S&L Corporate Relationship Manager Patrick Karanja said.
Mr Karanja observed that stamp duty on mortgage transfers is too expensive particularly for first-time homeowners and so the government should either consider reducing it or scraping it altogether.
“As a financier we provide up to 90 percent of the value of the property to individual buyers. Additionally, the buyer is expected to pay a stamp duty which is fixed depending on where the property is. This definitely increases the cost of the property and sometimes discourages many people from taking up mortgage,” he explained to housing stakeholders.
But the government in turn made its demands on the market players with Nairobi Metropolitan Minister Robinson Githae asking mortgage firms to consider developing a mortgage product that would make it easier for developers to receive 100 percent financing.
"As a government we are happy to see developers take the initiative to venture into property development outside Nairobi thus improving the level of housing for Kenyans across the country," said Mr Githae.
S&L has so far increased its lending limit to developers from Sh100 million to Sh250 million in an effort to boost property development efforts while trying to reduce the financial burden for property investors.
Developers now receive up to 85 percent financing of construction costs up from the 70 percent previously met by the company.