Lands and Housing Cabinet Secretary Alice Wahome has clarified that Kenyans contributing to the government’s affordable housing levy will still be required to pay for homes under the initiative.
Speaking during a simulcast on Nation FM and NTV, Wahome explained that the mandatory deductions under the housing levy are not a direct payment toward homeownership but rather a means to finance the construction of affordable housing units.
“The money you are contributing is not supposed to give you a house; it is helping us build the house. After that, it is you who pays for that house,” Wahome stated.
She further noted that the homes will be allocated under a rent-to-own arrangement, where beneficiaries will make monthly payments for up to 30 years to eventually own the property.
“We are not building to give them to you; it is for a rent-to-own agreement. Think of it as a tenant purchase scheme. The payment period is thirty years, but if you can pay sooner, you’re welcome to do so,” she added.
The housing levy, introduced under the Finance Act 2023, requires salaried employees to contribute one point five per cent of their monthly earnings, an amount matched by their employers. President William Ruto has indicated that this contribution could increase to three per cent over time.
“Every employee who contributes three per cent will have their employer also contribute three per cent to the housing kitty,” Ruto said during a church service.
The initiative aims to address Kenya’s housing deficit and create employment opportunities. However, concerns have been raised over its implementation, particularly regarding affordability for low-income earners.
While Housing and Urban Development Principal Secretary Charles Hinga had previously described the levy as a form of savings, Wahome now categorizes it as a tax.
“The housing fund is not a tax but a saving. It confers a direct right to either own or rent the house when it is complete,” Hinga had stated in March 2023.
However, Wahome now asserts that despite the mandatory contributions, Kenyans will still need to purchase houses under the scheme.
“If this is open to everyone who requires decent housing at these low rates, I would not even start the construction. It will be a problem determining who to choose for the housing,” she noted.
The clarification comes amid ongoing legal and public debates over the feasibility of the affordable housing project, especially for Kenyans living in informal settlements.
