Editor,

RE: "Exercise caution before introducing new levy on property transfer” (The New Times, November 6).

You can indeed sell what you did not build (in case of property). When you buy a house with money (mortgage) borrowed from a bank you can sell that property as long as the bank gets back its interest in that property. When you buy a property, you need to first of all qualify for a mortgage and you are required to pay a down-payment, which is a percentage of the value of the property. The property title will be in your name and not the bank’s.

However, the bank’s mortgage has to be registered against the property so that the bank’s interest in that property is catered for in case you default on the mortgage, and the bank has no other option other than to try to recoup its money.

No one can sell a mortgaged property without the knowledge of the mortgagee (lender). So, the assertion that you cannot sell what you did not build is totally wrong.

I also believe that people who are drafting the law in question understand it well. Also, tax levy on property transfer has been in existence in many countries for a long time. I am actually surprised that, to date, Rwanda has no such a tax.

Seth