Kenya’s President Uhuru Kenyatta launched the Big Four housing agenda which has so far been a good promise to Kenya’s needful housing sector. Launched in after the last elections, below are the steps the government has taken towards the achievement of the goal.
A 15% corporate tax relief which the government has allowed for developers who put up at least 100 affordable residential houses annually.
The Income Tax Act has also seen amendments signed into law that will allow buyers to get a 15% tax relief to a maximum of KSh. 108,000 per year or KSh. 9,000 per month under the newly introduced Affordable Housing Relief section.
Further, the signing into law of an amendment to the Stamp Duty Act has been actualized, which will exempt first time home buyers from paying the Stamp Duty Tax (normally is 2.0% – 4.0% of the property value).
The Finance Bill 2018, which includes a clause on employees’ contribution to the National Housing Development Fund, as proposed in the National Budget reading for 2018/2019 has also been signed into law. As per the clause, employees shall contribute 1.5% of their gross salary to the fund, while employers top this up with a similar amount.
In September last year, the President signed into law the Supplementary Appropriation Bill No. 2 of 2018, giving the housing department KSh. 21 billion which was a 223.1%. increment from the KSh. 6.5 billion allocated in Kenya National Budget 2018/19, in support of the affordable housing initiative.
This followed the Cabinet’s approval of the guidelines for the implementation of the initiative in terms of projects’ financing, cost, design, quality and affordability.
In November 2018, the Ministry of Transport, Infrastructure, Housing and Urban Development published the Housing fund Regulations 2018 meant to govern the National Housing Development Fund introduced by the Finance Act 2018.
The national government has also proposed a 15.0% tax waiver on Housing Co-operatives. In addition the National Cooperative Housing Union (NACHU) has plans to embark on the establishment of a regulated mortgage Sacco in a model that is set to see the board access mortgage funding from the KMRC.
Last week, the Central Bank of Kenya published the draft regulations, the Mortgage Refinance Companies Regulations, 2019, to govern the establishment of Mortgage Refinancing Companies in the Country.
The UN-Habitat has also advised the government to formulate policies that ensure the 23,000 Savings and Credit Co-operative Organizations (SACCO’s), who have close to KSh 1 trillion in savings, have access to serviced land, professional expertise, and reduced tax on building materials that would facilitate provision of mass affordable housing to low income earners.
Read; CBK sets stage for Mortgage Refinancing Companies in Kenya
