Proposed 3% Housing Fund Levy: Is This A Chance For Kenyans To Be Home Owners?

House levy

President Ruto announced plans to introduce a 3% housing levy for every employee with employers contributing an additional 3%.

Which means that your employer will add another 3% to your housing fund of 3% making a total of 6% contribution.

For example, if you are earning Ksh. 10,000, you will contribute only Ksh. 300 to the housing fund levy and your employer will add you another Ksh. 300 (which is not deducted from your salary) making the total of your contribution to be Ksh. 600.

This proposed levy by his excellency president William Ruto encountered mixed reactions from Kenyans after finding out there will be a new deduction to their payslip for a chance to own their own houses.

Understanding The 3% Housing Fund Levy:

So, what is a Housing Fund Levy, how does it work, who benefits from it and how is it being deducted?

In a nutshell, a housing Fund is a sum of money contributed to the development of housing facilities within a country. 

In Kenya, the housing fund came into effect in 2019 when the government introduced a 1.5% salary cut for every employee.

Every employee would contribute about Ksh. 200, with the limit of the combined deductions not exceeding Sh 5,000 per month. 

After a group of employers challenged it in court, the implementation of the fund didn’t go through.

In December 2019, former president Uhuru Kenyatta directed the National Treasury to make the housing levy voluntary. 

According to the president of Kenya, the levy now isn’t optional and to lead by example the civil servants will take the lead before extending it to other workers in the formal and nonformal sectors.

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“We will start with all 700,000 civil servants who will contribute 3%, the government will also contribute 3% to the Housing kitty,” said president William Ruto.

This means that all government employed Kenyans will be the first ones to own houses from the proposed housing fund.

The government is on a plan to build over 200,000 affordable housing units every year.

The government intends to build 1 million housing units by 2027 and low-income earners in the country will take up the units offered by the affordable housing programme. 

The project is on a mission to ensure as many Kenyans as possible in the country are home owners and create job opportunities to Kenyans in the process.

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