Folks, President William Ruto signed into law the Affordable Housing Bill 2023 this morning.
Effectively, we now have the Affordable Housing Act, 2024 in place.
I finally got my hands on the vellum.
Here's what I think you need to know.
A 🧵
Effectively, we now have the Affordable Housing Act, 2024 in place.
I finally got my hands on the vellum.
Here's what I think you need to know.
A 🧵
Two provisions in the Act are effectively IMMEDIATELY (i.e. March payrolls have been caught):
· Employee deductions at 1.5% of gross per Sec4 of the Act
· Employer matching employee's deductions per Sec5 of the Act
Other provisions will be made effective via gazette notice
· Employee deductions at 1.5% of gross per Sec4 of the Act
· Employer matching employee's deductions per Sec5 of the Act
Other provisions will be made effective via gazette notice
The 15.0% Affordable Housing Relief will be extended as per Sec30A of the Income Tax Act. The relief is capped at Kes 9,000.0 per month or Kes 108,000.0 per annum.
What does eligibility look like?
· You'll need a deposit
· You'll need a KRA PIN + Tax compliance certificate (many will get caught here)
· You'll need copy of your national identity card/incorporation certificate in the case of a body corporate
· You'll need a deposit
· You'll need a KRA PIN + Tax compliance certificate (many will get caught here)
· You'll need copy of your national identity card/incorporation certificate in the case of a body corporate
On the requirement of a deposit:
· Sec52 provides that an eligible person may make voluntary savings with the fund for purposes of raising the deposit towards the allocation of an affordable housing unit.
· One can withdraw voluntary savings but not their mandatory deductions
· Sec52 provides that an eligible person may make voluntary savings with the fund for purposes of raising the deposit towards the allocation of an affordable housing unit.
· One can withdraw voluntary savings but not their mandatory deductions
If you go the route of seeking a mortgage from the Affordable Housing Fund to construct a unit in the countryside, both the voluntary savings & the land on which you construct will be attached as collateral.
You will require the consent of the Affordable Housing Board to sell the affordable housing unit you purchased.
Clusters of housing:
· Social housing is for those with monthly income <Kes20k
· Affordable housing targets those with monthly income between Kes 21k & Kes 149k
· Affordable middle-class housing: Monthly income between >Kes150k
· There's rural affordable housing
· Social housing is for those with monthly income <Kes20k
· Affordable housing targets those with monthly income between Kes 21k & Kes 149k
· Affordable middle-class housing: Monthly income between >Kes150k
· There's rural affordable housing
· The Act is still mute on how exactly it intends to net those Kenyans who are not on payslips despite the provision of Sec4b
· Sec5(2), any entity matching deductions is spared the provisions of Sec4b (i.e, the section targeting non-payslip)
· Sec5(2), any entity matching deductions is spared the provisions of Sec4b (i.e, the section targeting non-payslip)
Here's a big (& welcome) one!!
· The Act sides with the Senate on the penalty for arrears on the levy. They will be pegged at 3.0% of the unpaid amount.
· The National Assembly had proposed penalties be tied to the Tax Procedures Act which would have been interest + penalty
· The Act sides with the Senate on the penalty for arrears on the levy. They will be pegged at 3.0% of the unpaid amount.
· The National Assembly had proposed penalties be tied to the Tax Procedures Act which would have been interest + penalty
Last week, the National Assembly had rejected the amendment from the Senate regarding the penalties arguing there was need for uniformity.
I am glad this was thrown out, it wasn't even going to be constitutional in the first place.
I am glad this was thrown out, it wasn't even going to be constitutional in the first place.
Sec43 & 44 of the Act indicate that:
· Development of institutional housing has been limited to public institutions
· Supply of goods & materials in connection with the construction of affordable housing units has been preserved for private players
· Development of institutional housing has been limited to public institutions
· Supply of goods & materials in connection with the construction of affordable housing units has been preserved for private players
The Act provides that the purpose of the Affordable Housing Fund shall be the:
· Design
· Development
· & maintenance of
affordable housing; institutional housing and associated social and physical infrastructure
I hope GOK be judicious with what defines "maintenance"
· Design
· Development
· & maintenance of
affordable housing; institutional housing and associated social and physical infrastructure
I hope GOK be judicious with what defines "maintenance"
Sec11 regarding allocation of proceeds from the funds lifts from the Senate's recommendations:
· Allocation to the collector capped at 0.5%
· Allocation to county committee's set at a floor of 0.5%. This shall be baked in as conditional grants to county governments
· Allocation to the collector capped at 0.5%
· Allocation to county committee's set at a floor of 0.5%. This shall be baked in as conditional grants to county governments
The ability of the board overseeing the Affordable Housing Fund to borrow as well as make investments has been retained.
Abundance of caution will be required on that provision paving way for borrowing.
Abundance of caution will be required on that provision paving way for borrowing.
In yet another win for the Senate, Sec15(2 & 3) of the Act provide that the Board shall submit the annual investment programme to the Cabinet Secretary who will then submit the programme to parliament (remember the change was from 'National Assembly' to 'Parliament')
The Senate's proposal to set the penalty for misappropriation of Affordable Housing Funds at <Kes20.0 million fine or imprisonment of a term not exceeding ten years, or both has been retained
The proposal to have a County Rural and Urban Affordable Housing Committee in each county has been retained.
The committee's core business will be, in consultation with the Board, developing a framework for the attainment of affordable housing in the county
The committee's core business will be, in consultation with the Board, developing a framework for the attainment of affordable housing in the county
& finally...
Any allocation of land held by the county government(s) towards affordable housing will have to go through public participation.
Any allocation of land held by the county government(s) towards affordable housing will have to go through public participation.
Loading suggestions...