Kenyans to resume paying housing levy this month as Ruto is set to sign the new bill into law

Government to resume deducting the 1.5 percent Affordable Housing levy from the end of this month after signing of the 2023 bill into law.

Employers and employees across the country should commence preparations for the imminent enforcement of the Affordable Housing Bill 2023, scheduled to be signed into law on Monday, March 18.

President William Ruto, during a tour in Bomet on Saturday, March 16, confirmed his intention to sign the bill, granting the government the authority to resume implementing the Housing Program within the confines of the law.

The legislation aims to reinstate the President’s housing initiative by levying a 1.5 percent charge on workers’ gross pay. 

Once signed, housing levy deductions, among other amendments, could commence as early as the end of March 2024, pending confirmation.

“On Monday, I will be signing into law the Affordable Housing Bill,” President Ruto announced during his tour.

The progression of the bill through Parliament faced its share of hurdles.

National Assembly Majority Leader, Kimani Ichung’wah, assured President Ruto of Parliament’s commitment to ensuring the timely deduction of the housing levy from Kenyan workers’ March salaries.

“We took the Housing Levy to Parliament and they passed it. I want to thank MPs,” Ichung’wah expressed his gratitude to the parliamentary team.

Explaining the urgency behind signing the bill into law in mid-March, Ichung’wah highlighted the need to enact it before companies initiated their payroll processing.

“As soon as the bill is signed into law, deductions will resume and be made in accordance with the new Affordable Housing Act,” Ichung’wah remarked.

The bill’s enactment renders ongoing litigation regarding the levy’s constitutionality, based on the Finance Act 2023, moot. However, potential legal challenges against the new Act’s implementation remain a possibility.

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Introduced in Parliament in December last year, the bill responded to a High Court ruling declaring the previous housing levy unfair and unconstitutional. 

The new legislation extends the levy beyond formal sector employees’ salaries and establishes the Affordable Housing Fund, overseen by a board of directors.

Furthermore, the bill introduces County Affordable Housing Committees to ensure local involvement in the project, acknowledging housing as a devolved function.

Persons who voluntarily saved for housing but haven’t been allocated a unit can now apply for refunds or opt for an affordable mortgage, under the provisions of the bill.

President Ruto’s ambitious housing agenda aims to construct 200,000 affordable units annually, generating hundreds of thousands of jobs. The government has allocated Sh73 billion in the current fiscal year’s budget to support this initiative.

As the Affordable Housing Bill of 2023 approaches enactment, it is poised to bring about significant changes to Kenya’s housing landscape, affecting both employers and workers.

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