3rd December 2022

1.5pct Affordable Housing Levy to Take Effect in May

Demand for Apartments Surge in Q2 2020 Due to Affordability

The government will start deducting 1.5% housing levy by the 9th of every succeeding month beginning May according to the Ministry of Housing and Urban Development.

“…provided that the sum of the total monthly contributions shall not exceed KSh5,000. Voluntary contributions may also be made to the scheme at a minimum of KSh2,000 per month,” the ministry said.

“The Housing Fund shall be used to finance the Affordable Housing Scheme under the Big 4 Agenda,” the notice reads.

The levy is expected to generate close to KSh57 billion annually from about Ksh 2.5 million salaried Kenyans. Additional revenue is expected to come from voluntary contributors at a minimum of two hundred shillings per month.

“Any person who fails, neglects or refuses to register under this regulation commits an offence and shall, upon conviction, be liable to imprisonment for a term of two years or a fine not exceeding ten thousand shillings or to both,” according to the regulations that have been gazetted.

However, the Federation of Kenya Employers (FKE)  says the directive to employers is unlawful because of a court order which is still in force, “FKE attended Court on 8/4/2019, obtained an extension of Court Orders suspending the implementation of the Housing Levy up to 20/5/2019,” said Jacqueline Mugo, FKE CEO.

“The Gazette notice is therefore unlawful and we shall keep you posted on any further developments,” said the FKE boss.