House Levy Brought Back Despite Court Ruling

Majority Leader Kimani Ichung’wah, also a Kikuyu Member of Parliament, has introduced a bill aimed at establishing a legal framework to regulate the affordable housing levy. This legislative move follows the High Court’s ruling, declaring the tax outlined in the 2023 Finance Act as unconstitutional and discriminatory.

Simultaneously, the Affordable Housing Bill 2023 suggests the creation of the Affordable Housing Fund, diverting funds collected from Kenyans to support President William Ruto’s legacy project.

“The bill’s principal object is to provide a legal framework for the establishment of the Affordable Housing Fund, access to affordable housing. It will impose the Affordable Housing Levy to finance the provision of affordable housing and associated social and physical infrastructure,” Ichung’wah states. 

Ichung’wah outlines three product categories – Social Housing, Affordable Housing, and Affordable Market Housing – each subject to charges based on a taxpayer’s income.

Specifically, social housing units, ranging from 18 to 20 square meters, cater to individuals earning below Ksh20,000. Affordable housing units, spanning 36 to 80 square meters, are designed for Kenyans with incomes between Ksh20,000 and Ksh140,000.

The affordable market housing unit, occupying a minimum of 60 square meters, is tailored for Kenyans earning over Ksh150,000.

According to the Kikuyu MP, the levy shall be charged at the rate of 1.5 per cent of the employee’s gross salary. Kenyans will be required to remit the money on the ninth day after getting their salary.

There will be a three per cent fine for late payment of the funds or the government will consider it as a civil debt.

Some of the requirements for allocation of a unit include having a Kenyan citizen over 18 years, having a copy of their identity card, the Kenya Revenue Authority (KRA) pin, and other relevant documents as required.

“In determining the allocation of an affordable housing unit under this section, the relevant agency shall give preference to marginalised persons, vulnerable groups, youth, women and persons with disabilities,” reads part of the bill.