The Government of Kenya has introduced tax relief, dubbed Affordable Housing Relief, that will see workers get KSh9,000 per month in tax relief that will be channeled to savings for homeownership.
The amount will be subtracted from income tax deducted, and the remaining submitted to KRA by respective employers.
However, this is a voluntary exercise, and will only be applicable to those who subscribe to the Affordable Housing Program.
With the third phase of the Affordable Housing Program set to be completed in December this year, the units will be put up for sale before allocation is done, whereby buyers will be required to have saved 12.5% of the selling price before getting a mortgage to offset the balance at 9% interest and for an extended period of up to 25 years.
“As strategic partners, the investors and developers in the Affordable Housing Programme will enjoy fast-tracking of approvals for projects, 15% corporate tax rate, no VAT on construction inputs for affordable housing projects and reduced customs tariffs on imported inputs,” said Charles Hinga, the Principal Secretary for Housing and Urban Development.