Kenya banks face property loan losses as new i-tax rules protect defaulters
Under the new rules, banks cannot transfer property in case a borrower defaults on mortgage payments because they lack documentation to compute capital gains tax. FILE PHOTO | NMG
A Kenya Revenue Authority loophole has enabled mortgage loan defaulters to resist auction of their property, putting banks at risk of losing billions of shillings.
KRA’s shift of stamp duty and capital gains tax (CGT) payments to its online, i-Tax portal in October last year and its demand that both levies be paid simultaneously before transfer of property is effected has made it difficult for banks to auction defaulters’ assets.
