Affordable Housing Bill: Non-salaried Kenyans to also pay 1.5% of their income

All Kenyans, both salaried and non-salaried, will be required to contribute 1.5% of their income towards the Affordable Housing Fund.

This is among 49 amendments captured in the Affordable Housing Bill, 2023 which was passed by the National Assembly on Wednesday.

While the proposal is considered a major step in addressing errors that were pointed out by the court, which suspended the housing levy on grounds that it was discriminatory, a section of leaders drawn from the opposition have still vowed to challenge it in court.

The opposition argues that there is lack of a clear mechanism to measure the gross income of non-salaried Kenyans, while also claiming that Parliament is being used to hurriedly pass Bills that serve the interest of government.

"And this is the complaint by salaried people...they’re saying why are you deducting money from me to build a house for someone else who has an income yet they are not paying the tax...so to tie that, we’re saying if you have to benefit from that house, you must have demonstrated that you’re paying the housing levy," National Assembly Finance and Planning Committee Chair and Molo MP Kimani Kuria said.

"There is a lack of formula that will be used to accurately arrive at 1.5% of the gross income of non-salaried Kenyans," Nominated MP and ODM National Chairperson John Mbadi added.

The amendments also list entities which will be mandated to implement the housing project, which will include the County Government, National Housing Corporation, State Department of Housing, and the Private Sector.

“Once the entities apply for this fund, they will build the houses as per the investment programme and hand the structures back to the fund so that the off-take of the houses will be managed by the board,” MP Kuria added.

The revised Bill also revokes the Affordable Housing Fund Regulations and requires that all monies paid through the Boma Yangu platform be transferred to the Affordable Housing Fund once it is implemented.

Fines for misappropriation of affordable housing funds have also been made more punitive.

"We have seen people being arraigned for serious crimes such as misappropriation of a billion shillings and they get a fine of Ksh.1 million...so that means that if all of us had the opportunity you’d rather steal and pay a small fine...so now we have made it expressly provided in the law that for whatever amount you have misappropriated, the fine is two times that amount," Kuria added.

Other significant amendments include the introduction of the institutional housing project which seeks to address the accommodation crisis in institutions of higher learning.

"We explicitly provided for institutional housing and the model is the money from the fund will go to these TVETs and universities to develop the housing units and once the units are done they will be handed over to the board and the money will be recovered from renting," Kuria noted.

With the Bill sailing through the National Assembly, it is now expected before the Senate for the first reading on Tuesday, with the government targeting to resume deductions from March salaries.