According to plans released by President William Ruto, taxes on any building materials used in the Affordable Housing initiative will be eliminated. Speaking at the start of Mombasa County’s home construction project, Ruto emphasized charges like Value Added Tax (VAT) that have driven up the price of building homes. Why eliminate building material taxes?
President Ruto clarified that the action is intended to forward his housing objective by allowing Kenyans to purchase homes at a reduced cost.
Plans to Eliminate Building Material Taxes
He further explained that the elimination of taxes will be emphasized in the Ministry of Lands’ gazetted Affordable Housing Financing in the upcoming weeks.
The head of state did not, however, back down from taxing imported household goods and materials as long as efforts are made to increase domestic manufacturing.
“I am going to remove taxes on all building materials used in affordable housing so that they can be accessed at a cheap price. We have agreed that we cannot continue to import the materials. That is why we have placed taxes on imported furniture,” said President Ruto.
Interest rates for low-class, middle class and upper-class people
Speaking on interest rates, Ruto emphasized that the Affordable Housing Financing that would be published in the Gazette will also set guidelines for different Kenyans’ mortgage rates.
For example, homes in the social housing category designated for low-income earners will be sold with an interest rate of 3%.
The houses offered to middle-class Kenyans will cost 6% of their income, while dwellings for upper-class Kenyans will cost 9%.
Interestingly, Ruto stated that the Cabinet had already approved the scheme.
“We have the opportunity in our lifetime to change and transform Kenya through affordable housing programme,” he stated.
Apart from his Plans to Eliminate Building Material Taxes, he also added that the government has intentions of building 200,000 new homes every year.
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