Housing Cabinet Secretary Zachariah Njeru has assured Kenyans that the housing levy will not only offer affordable housing to Kenyans, but it will also help in the improvement of infrastructure across the country.
Appearing on KBC, the CS further stated that the Affordable Housing project will offer direct employment to 3 to 5 people per unit and indirect employment to 5 to 8 people per unit.
He reiterated the fact saying that the government will heavily involve the Jua Kali sector to ensure the success of the project.
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“It is a fund that is meant to transform the livelihoods of Kenyans” the CS Njeru stated adding that the fund will be used to build sewers, provide water and power to the dwellers.
The Housing Levy
The Affordable Housing fund has been a bone of contention since it was introduced by the Finance Act 2023.
In addition, the Housing Levy is a mandatory financial contribution meant to help employees get affordable housing and improve the housing situation in Kenya – at least according to the government.
Moreover, the employer and employee each contribute 1.5% of the employee’s gross salary to the National Housing Development Fund monthly.
This deduction is to help fund a national building project of up to 250,000 low-cost homes annually.
Initially, the Finance Bill 2023 proposed a monthly fixed contribution of Ksh 5,000 from the employer and employee.
However, after further debate and amendments, the National Assembly approved it as a deduction that depends on the employee’s salary, capping it at 1.5% of the gross pay.
Accessing funds
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The CS clarified that Kenyans would access their contributions through the Kenya Mortgage and Refinance Company (KMRC).
He also stated that the Ministry of lands, housing and urban development will collaborate with financial institutions through the KMRC to provide loans to people wishing to buy or build houses at reasonable single digit interest rates.
