By Felix Andrew
TANZANIAN government has been asked to take out Value Added Tax (VAT) imposed on houses and construction materials to enable more people own units at affordable price.
Speaking to Azania Post, the Chief Executive Officer of Watumishi Housing Company, (WHC), Dr Fred Msemwa, said removal of VAT on houses and construction materials will lower prices of the houses by far.
Citing he said a WHC for a house with a starting price of 39m/- VAT inclusive would sell at shillings 33m/- if VAT was to be removed.
“Therefore you can see to what extend the houses will be more affordable, we have approached the government about the removal of VAT on houses for public servant and it’s our hope sooner or later this will be in place”, he said .
Asked on whether the company sell higher cost houses, he said it is not true since their main fouc is on the lower segment and middle income earners.
Our prices are lower between 10 percent to 30 percent compared by similar houses in the market.
He said prices range from Shillings 39 million to 85m/- VAT inclusive whereby WHC customers enjoy flexible payments arrangements.
The repayment period for mortgage has been increased to 25 years hence making our houses more affordable to many.
He said they also get better mortgage interest rates for their clients from banks that are in partnership with. The interest rates offered by the banks range from 15 percent - 16% which is better than the ones offered by the market average which are 20%+.
Regarding criteria used to construct houses in the country, he said first they look for an area that is big enough for them to build spacious homes but also a convenient areas where their clients will not have to worry about infrastructure, social service, availability of water, electricity and accessibility of local transport.
“We make sure our houses are modern with large compounds, well planned streets and wide landscaping as these components are a necessity in master planned communities”, he said.
He also said location plays a big role in real estate especially in places where in one neighborhood houses might sell for one price and just a block away they sell for an entirely different price.
Another criteria is building quality homes at an affordable price and they do not compromise on the quality of the house but at the same time they focus on making the units affordable to as many customer groups as possible.