The Kenya Kwanza government has set its sights on collecting a substantial monthly revenue of between Sh9 billion to Sh10 billion from the Housing Levy, following the enactment of the Affordable Housing Bill into law this week. In a recent interview, Housing Principal Secretary (PS) Charles Hinga revealed that this ambitious target is what they are aiming to achieve.
Hinga explained that prior to the court-ordered halt, they had reached a peak of Sh5 billion in monthly collections. This figure was further bolstered by a government contribution of approximately Sh1 billion, bringing the total to between Sh6 billion to Sh6.5 billion per month.
1.5 per cent Affordable Housing Levy
Moving forward, employees across various sectors will now face a 1.5 per cent deduction from their gross monthly salaries, a contribution that will be matched by their respective employers. Additionally, individuals in the informal sector and those without fixed salaries will also be required to contribute 1.5 per cent of their monthly gross earnings towards the housing project.
PS Hinga also highlighted another key change brought about by the new law, which eliminates the necessity for Kenyans to pay a 10 per cent deposit upfront to secure affordable homes. He mentioned that this amendment was a direct response to feedback gathered during public participation sessions for the Housing Bill.
The 10 per cent deposit requirement had been a major hurdle for many Kenyans interested in the affordable housing programAffordable housin. With its removal, prospective homeowners are no longer burdened with the upfront financial strain previously associated with acquiring affordable housing units.
Previously, applicants for affordable housing units were required to furnish proof of a 10 per cent deposit based on the unit’s value, along with documents such as Kenya Revenue Authority certificates, personal identification numbers, and national identity cards.
The government’s efforts in this area are underscored by the ongoing construction of 100,000 affordable housing units across different regions of the country. During the launch of the Ministry’s Strategic Plan for 2023-2027, CS Wahome emphasized that the affordable housing project is crucial in addressing the significant housing deficit, which currently stands at 2 million units for the burgeoning urban population.
In conclusion, the Kenya Kwanza government’s Housing Levy initiative, coupled with the Affordable Housing Bill’s provisions, represents a proactive step towards alleviating housing challenges and fostering sustainable urban development in the country.
