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Ruto signs Affordable Housing Bill into law

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The new law provides for the affordable housing levy at the rate of 1.5 per cent of the gross income of a business or an individual and a matching contribution of the same amount in the case of employers.

President William Ruto's Affordable Housing dream is now officially back on track after he assented to the Affordable Housing Bill on Tuesday.

The assentment of the Bill comes just days after it was passed by Parliament.

The signing ceremony which was held at State Nairobi was attended by Deputy President Rigathi Gachagua, both Speakers of Parliament, Cabinet Secretaries as well as other senior government officials.

The new law provides for the affordable housing levy at the rate of 1.5 per cent of the gross income of a business or an individual and a matching contribution of the same amount in the case of employers.

The 1.5 per cent tax from both the employer and the employee will take effect at the end of the month.

It also provides for a double taxation check, by exempting persons who pay the matching contribution from paying the levy on their gross pay.

President William Ruto affixes the Public Seal to the new Affordable Housing Law at State House, Nairobi on March 19, 2024.(Photo: PCS)

It further provides for affordable housing relief at 15 per cent for employees who make contributions to the Levy. Other tax-related incentives relate to the reduction of the turnover tax from 3 per cent to 1.5 per cent, to alleviate the tax burden for the informal sector.

The law establishes a Fund, into which the levy is payable and the Fund shall be managed by Affordable Housing Board which shall be responsible for the management of monies raised through the Housing Levy.

Legislation

The courts had last month abolished the levy but the Kenya Kwanza administration moved to have it back through legislation.

An appellate court on January 26 rejected the government's bid to continue collecting the levy under the tax law.

While speaking in Bomet County over the weekend, Ruto said the housing project is going to give jobs to young people, giving them decent living conditions.

"That is the work I will do on Monday because we are in agreement with the court to have legislation that will anchor the affordable housing programme into law," said Ruto.

President William inspects the Kibra Affordable Housing Project on November 22, 2023. (Photo: PCS)

The new law creates accountability mechanisms including a requirement that the Board shall prepare a five–year investment programme and an annual investment programme, which shall be approved by the Cabinet and shall consequently be tabled in Parliament.

The investment programmes shall guide the allocation of funds for the implementation of the affordable housing programmes.

The law also defines the role of County Governments in affordable housing and provides for the establishment of County Affordable Housing Committees to advise governors on affordable housing programmes within their counties.

It also provides for the eligibility criteria and application procedure for an affordable housing unit.

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