Cytonn Investments company has launched the Cytonn Affordable Housing Investment Plan (CAHIP) that will help potential home owners save for their dream houses/homes.
In partnership with its money market fund arm, the Cytonn Money Market Fund, the plan will enable housing savings that can yield up to 11 percent p.a and is targeting about 10,000 individuals.
The new investment plan will be underpinned by the government’s Home ownership savings plans (HOSP), whereby individuals who opt for this plan are able to benefit from a reduction on their taxable income to a maximum of Ksh8,000 per month.
Initially, the home ownership savings plan was limited to banks and saccos, but the Finance Act 2019 opened doors to Fund Managers and Investments Banks registered under the Capital Markets Act, effective January 1, 2020.
The savings can only be spent on buying land, buying a house or constructing a house. Cytonn will require evidence to show that indeed the saved money will be used to build a home.
In case savers decide to withdraw the money for other purposes other than building/buying a home, the amount will be taxed. The home must be a permanent house, that can be used for morgage.
The savings can also be used to build a credit profile, since the records can be used to acquire mortgage.
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