May 22, 2024

KRA goes after landlords over housing levy

3 min read
KRA goes after landlords over housing levy

Kenya Revenue Authority (KRA) demands 1.5% from landlords gross rental income as housing levy charge

Kenya Revenue Authority (KRA) demands 1.5% from landlords gross rental income as housing levy charge.

Landlords are now required to remit 1.5 percent of their gross rental income starting May 9.

According to a letter dated May 6, seen by the Star and written by the Kenya Revenue Authority Head Domestic Taxes Department, North Rift region, the amount will be due by the ninth of every month going forward.

KRA noted that the Affordable Housing Act 2024 introduced the Affordable Housing Levy for all persons. 

“This is, therefore, to remind you to remit the AHL by the due date of the 9th of every month, starting this month of May 2024. For clarity, AHL will be charged at the rate of 1.5 percent on the gross income received or accrued,” the letter reads in part.

The said income, the tax authority clarified, covers the gross rental income, gross sales receipts (amount chargeable to turnover tax), and any other sales, before subjecting the same to VAT.

“We would also like to urge you to take advantage of the Tax Amnesty program introduced in the Finance Act, 2023 by paying all the principal taxes outstanding for the period up to December 2022, by June 30, 2024,” it added.

For any clarification, landlords and other affected persons can contact their usual account manager or visit the nearest KRA office.

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The Authority is the designated collector of the Affordable Housing Levy.

The Affordable Housing Act also introduced a 1.5 percent levy on the gross salary of each employee or an individual’s received or accrued gross income not subject to the Levy.

Employers are required to match each employee’s contribution by contributing an equal amount to the Levy amount.

KRA clarified that all employers are required to declare the AHL 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 222 222 or by dialling *222#.

According to KRA, the employer’s contribution to the Affordable Housing Levy is an allowable deduction under Section 15 of the Income Tax Act.

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