Kenyan housing tax law: Key points you suppose know

Kenyan President William Ruto

Wia dis photo come from, Getty Images

Kenyan President William Ruto don sign one new law wey go require Kenyans to pay a 1.5% monthly tax to fund construction of low-cost houses.

In the controversial Affordable Housing Act 2024 don reintroduce mandatory levy wey in goment bin start to dey deduct last year July from both employers and employees.

In courts bin declare in housing tax unconstitutional sake of say e bin no get legal framework to support in deductions.

Court bin also rule say di levy unfairly targets Kenyans wey dey work for in formal sector and order payments to dey suspended.

In new legislation wey parliament bin approve last week go address on issues wey in courts bin raise.

Businesses don’t be included for in the scheme and they are required to contribute 1.5% of their monthly gross income.

Wetin you gatz know about dis new law

Goment say dem wan use di levy for construction of affordable housing for poorer Kenyans.

Dem say in new tax go take effect at end of dis month and dem no go backdate am.

According to President Ruto, the housing fund targets to build about 200,000 homes annually – e say dis go create at least 500,000 jobs each year.

In legislation go establish the following four types of low-cost houses,

Social housing unit for pipo wey dey earn below Kshs 20,000 ($147),

Affordable housing unit for those earning less than Kshs 149,000 ($1,093),

Middle-class housing units for people earning above Kshs 149,000 ($1,093);

Rural affordable housing units for those living outside urban areas.

Wetin pipo dey tok?

Dis levy don cause tok-tok from in opposition and many Kenyans, wey plenti taxes introduced by President Ruto dey choke dem.

In opposition don threaten to take diss new law go to court, as dem allege say goment ignore concerns of Kenyans ova on increasing tax burden.

Critics also say di bill fit no properly addresses the root causes of housing crisis and e fit only benefits some pipo through corruption.

President William Ruto don tok say in project na one of di goment efforts to improve affordable housing for di kontri.

Na one new Affordable Housing Board go manage in fund, based on annual investment program.