Housing levy not early payment for affordable homes, you must rent-to-own: Wahome » Capital News

NAIROBI, Kenya, Feb 19 — Mandatory affordable housing deductions will not a guarantee contributors of houses under the scheme with government emphasising that those seeking to acquire homes under the scheme must sign up for financing.

Housing Cabinet Secretary Alice Wahome on Wednesday noted the government was tapping on the deductions to suppport offtake while allowing rent-to-own plans below standard market rates.

She told NTV’s Fixing the Nation the rent to own scheme can ran for up to 30 years.

“The money you are contributing is not supposed to give you a house; it is basically the offtake. It helps us build the house, but after that, it is you who actually pays for that house. We are not building and giving you. It is like tenant purchase—you rent to own,” Wahome said.

The CS reiterated that the government is not profiting from the affordable housing project, emphasizing that it is only subsidizing the sector to enable Kenyans to access decent housing.

Wahome also announced the government will release 4,888 units by the end of March and plans to release 4,000 to 5,000 units quarterly.

“Most of our construction periods for each project are between 12 and 18 months, and if it is a bigger project, 24 to 36 months. In the next year, I should have close to 140,000 units,” she said.

1.5 per cent charge on salaries

The housing levy was introduced by the Affordable Housing Act 2024, which mandates a 1.5 per cent deduction from employees’ salaries, with an equivalent contribution from employers, as part of the government’s target to construct 200,000 affordable housing units annually nationwide.

Employers are required to pay the levy by the ninth working day of each month. The Affordable Housing Board manages the kitty.

Government secured a go ahead to charge the levy after the High Court, on October 22, upheld it as constitutional, clearing the way for the full implementation of President William Ruto’s affordable housing initiative.

Justices Olga Sewe, John Chigiti, and Josephine Mong’are rejected a petition led by Busia Senator Okiya Omtatah, who challenged the legality of the levy, claiming it lacked public participation and was unconstitutional.

The court ruled that Parliament is within its powers to impose taxes under Article 95 of the Constitution and found no violation of the law.

The judges also dismissed claims of discrimination, stating that the levy applies uniformly to all Kenyans.