Tanzania to slash VAT on houses

Newly built houses for sale will in the coming fiscal budget be relieved from Value Added Tax (VAT) to allow more low income earners to own decent homes at affordable cost.

Deputy Minister for Lands, Housing and Human Settlement Development Angelina Mabula, speaking at her familiarisation tour of Watumishi Housing Company (WHC) in Dar es Salaam yesterday, said the process of reducing VAT on houses was at an advanced level and will be tabled in the next budget.

“A lot has been done on the issue of VAT on houses by the special task force at the Treasury office. We continue to make close follow-up on the matter to ensure that the low income earners' dream to own decent homes at an affordable price is realised,” she said.

Ms Mabula urged WHC to consider establishing new projects in the rural areas to cater for the high demand of decent houses for public servants, an incentive that will attract many others to work in the remote places.

Tanzania is estimated to have a housing deficit of three million units and growing at a rate of 200,000 units per annum.

The National Housing Corporation (NHC) estimates that Tanzania needs around 200,000 units annually worth Sh19 trillion to meet the demand.

In his welcoming remarks, the WHC Chief Executive Officer (CEO), Dr Fred Msemwa said by reducing VAT on houses, more houses will not only be bought but also investors in the real estate will invest in massive projects.

“The move to slash VAT on houses will have a positive impact on the sector with more projects executed, allowing the government to collect more property and land taxes,” he said adding that WHC has already constructed about 768 houses.

He named the regions with the housing units in brackets as Tanga at Pongwe area (40), Mwanza at Kisesa Township (56) and Dar es Salaam which will receive the bulk of the houses to be built in Kigamboni (400), Bunju (190) and Magomeni Usalama (104).

At Magomeni Usalama project, WHC is set to build two flat buildings with 15 floors each. Besides Dar es Salaam, Morogoro, Tanga and Mwanza, other regions that will benefit from the construction of the low cost houses are Dodoma, Ruvuma, Mtwara, Mbeya, Kigoma, Mwanza, Shinyanga, Arusha, Tanga, Lindi and Coast.

It is in Coast Region where WHC is set to radically change the face of Kibaha Township by launching a massive project to build 1,000 housing units in what will be a satellite town aimed at warding off the town’s residents commuting to Dar es Salaam for shopping.
Source: Daily News, reported from Dar es Salaam, Tanzania
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