First time home buyers to get stamp duty exemption

Home buyers will soon benefit from tax incentives as the government looks to ease home ownership under its housing agenda.

Through the Tax Laws amendment bill, the government will exempt stamp duty charges for first time home buyers, a move that is likely to make it more affordable to buy a house.

Currently the government charges a stamp duty of between two and four percent of the value of the house heaping on pressure on buyers.

But under the government housing plan, the state plans to put to market 50,000 houses at between Sh750,000 and Sh1.5 million.

This will target both social and low cost housing to bridge the housing deficit.

Consultancy firm PwC said the exemption would be a meaningful incentive for buyers but however said better clarity is required on the state housing plan.

“An affordable housing scheme is not defined so clarification on this point is required,” PwC said in a note.

At the same time, depositors investing in registered home ownership savings plan schemes will also benefit from Sh96,000 in annual tax deductions in a bid to stimulate home savings.

This a major tax incentive aimed at mobilizing funds for construction of houses.

The proposed deduction is an increase from the Sh4,000 per month or Sh48,000 per annum depositors currently enjoy.