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
What you need to know:
The Kenya Revenue Authority shifted stamp duty and capital gains tax payments to its online portal in October last year, and demands that the two levies be paid simultaneously before transfer of property is effected.
The policy shift has thrown banks into a legal battle with the taxman after the lenders were left holding securities that they are unable to sell to recover their loans.
Borrowers are expected to upload details of capital gains on their property on the online portal before any transfer can be effected, thus barring auctioneers.
