Before March 2024, Kenyans contributed to the Affordable Housing Program through a savings plan called the Housing Fund. This fund aimed to help address Kenya’s housing shortage by building more affordable homes.
Like any new law in Kenya, the public was invited to share their opinions and suggestions about the Housing Fund. There were some objections, and it was even challenged in court because some argued that savings should not be part of a money bill.
In March 2024, the National Assembly made a change. They passed a law turning the Housing Fund into the Housing Levy—a tax that every employed Kenyan must pay. The levy rate was set at 1.5% of a person’s salary to make it more affordable. The Kenya Revenue Authority (KRA) now collects this levy alongside other taxes.
The Housing Levy will help the State Department for Housing and Urban Development build affordable housing across Kenya, providing safe, decent homes at lower prices for all Kenyans.
Can I Buy a Home Through the Housing Levy?
While the Housing Levy funds the building of affordable homes, you still need to save for a deposit and make structured payments to buy a house. The levy helps reduce home prices by increasing the number of affordable homes available.
The levy also supports low-interest loans and other financing options, making it easier to afford a home. Voluntary savings made through an online account are separate from the levy and can be used as part of your deposit when buying a house.
Do I Get a Refund if I Don’t Buy a House?
The Housing Levy is not a personal savings fund, so it’s not refundable. It’s a national initiative to ensure homes stay affordable for all Kenyans. While you may not buy a home, the levy helps reduce home prices and improves the quality of life through better infrastructure like roads, schools, and hospitals.
Will I Get a Discount if I’ve Been Paying the Housing Levy?
The Affordable Housing Program offers homes at prices below the market rate for everyone. There isn’t a direct discount for paying the levy, but you will benefit from lower home prices, access to better financing options, and the Tenant Purchase Scheme (TPS), which makes owning a home more affordable.
Why Should I Pay the Levy If I Don’t Want to Buy a Home?
Even if you don’t plan to buy a home, the Housing Levy benefits everyone. It helps increase the number of affordable homes, stabilize housing prices, and create new jobs and economic opportunities. The program also builds important infrastructure like schools, hospitals, and roads, which improves everyone’s quality of life.
How Can I Check My Housing Levy Payments?
If you’re employed, your Housing Levy payments are shown as statutory deductions on your payslip. For self-employed individuals, it appears in tax records. Since the levy isn’t part of your personal savings, it won’t appear in your Boma Yangu account, but it still plays a big role in making housing more affordable.
Can the Government Use Housing Levy Funds for Other Things?
No. The Housing Levy is strictly for the Affordable Housing Program. It can only be used to build homes, improve infrastructure, and support financing options for homebuyers. Regular audits ensure the money is spent as intended.
Can I Move My Housing Levy Deductions to My Voluntary Savings Account?
The Housing Levy and voluntary savings are two separate things. The levy helps fund the overall program, while voluntary savings in your Boma Yangu account can be used as part of your home deposit.
In short, the Housing Levy is a national effort to help create affordable housing for all Kenyans, even if you’re not currently planning to buy a home. By paying the levy, you’re contributing to a better housing market for everyone!
Read: 6 Reasons You Should Buy An Affordable Housing Unit
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Why can’t the govt deduct salaried employees monthly house installments and end up with a house rather than a levy and at end of time those who were paying the levies will still buy the houses at the same price with those who never contributed any levies?