The Housing Levy in Kenya is a significant initiative to address the country's housing crisis and improve access to affordable housing for its citizens. Introduced by the Kenyan government, this levy is designed to mobilise funds for the construction of affordable housing units across the country. But what is the Housing Levy, and how much do you pay?
The Housing Levy in Kenya is a 1.5% deduction on the monthly gross salary of all salaried employees. It is aimed at financing the construction of affordable housing for economically disadvantaged Kenyans.
The levy is part of the Affordable Housing Act, which President William Ruto signed into law on 18 March 2024. It is also a mandatory contribution that employers and employees make to help pay for affordable housing in the country.
The law requires every employer to contribute 1.5% of an employee's monthly gross salary to the Housing Levy. In comparison, employees will also contribute 1.5% of 3% of their monthly gross salary to the housing levy.
The Kenya Revenue Authority (KRA) collects the levy due by the 9th day of every month. The levy also applies to non-salaried individuals, who must contribute a Housing Levy percentage of 1.5% of their gross income.
The Affordable Housing Fund, established by the Act, will manage the government's revenue from the levy. The goal is to build up to 250,000 low-cost homes annually, create jobs, and address housing affordability issues in the country.
Residents who prove they paid the levy in a year of income will be entitled to affordable housing relief of up to KES 108,000 per annum. Failure to remit the House Levy tax in Kenya by the due date will result in a 3% penalty on the unpaid amount, which will accrue for each month the levy remains unpaid and be recovered as a civil debt.
Employers are responsible for deducting the 1.5% contribution from their employees' salaries and remitting 3% to the Kenya Revenue Authority (KRA). These deductions should be submitted to the KRA by the 9th working day after the end of the month in which the gross salary was due.
Once done, employers must declare the Housing Levy under sheet "M" of the PAYE return on iTax, generate a payment slip under the tax head "agency revenue" and tax sub-head "Housing Levy", and make payments at KRA agent banks or mobile money through eCitizen Paybill Number 222222 or by dialling *222#.
The Housing Levy relief in Kenya is as follows:
Affordable housing relief was extended and effective on 19 March 2024, when the Affordable Housing Act of 2024 was signed into law.
Here is how non-salaried individuals in Kenya can calculate their Housing Levy contribution:
For example, if a non-salaried individual has a gross income of KES 100,000 in a given month, they would calculate their Housing Levy contribution as follows:
To be eligible for the Affordable Housing Program (Boma Yangu) in Kenya, you must meet the following criteria:
It is important to note that this KES 200 is separate from the Housing Levy. The Boma Yangu program, however, is a voluntary savings scheme that enables Kenyans to save for and eventually own affordable homes.
Register on the Boma Yangu portal or through the *832# USSD code to apply for affordable housing in Kenya. The registration process requires you to have a valid Kenyan national ID and be 18 years old.
After registering, you must deposit a minimum of KES 200 to activate your account. You can save any amount using mobile money, credit/debit cards, or cash deposits at authorised banks like KCB, NCBA, and Cooperative Bank.
As a registered saver, you can browse the available affordable housing projects on the Boma Yangu platform and add your preferred units to your wishlist. When selecting a unit, the platform will show you the 10% deposit amount you need to save to be eligible for allocation.
The eligibility for an allocated unit depends on factors like your family status, demand across housing categories, and the time it takes to reach the required deposit amount. If you do not get a unit in the first round, you will be put on a waiting list for priority in subsequent allocations.
The affordable housing program is open to all Kenyan citizens, with each person only eligible for one home.
The approval timeline for affordable housing in Kenya can vary based on factors like when you save enough money, family situation, and other social factors. Typically, after the construction projects are completed, the process of allocating homes will begin, and registered members will be notified when this process starts.
The Housing Levy in Kenya is a mandatory contribution introduced through the Affordable Housing Levy Act 2024. Employers and employees must each contribute 1.5% of the employee's monthly gross salary towards this levy. The levy aims to fund the initiative to build affordable housing, with a target of 250,000 homes annually.
DISCLAIMER: This article is not sponsored by any third party. It is intended for general informational purposes only and does not address individual circumstances. It is not a substitute for professional advice or help and should not be relied on to make decisions of any kind. Any action you take upon the information presented in this article is strictly at your own risk and responsibility!
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A collage of Boma Yangu housing units and government officials at housing units
Housing units under construction
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