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MPs propose more changes in Affordable Housing Bill 2023 as debate begins

MPs have proposed to abolish the requirement that Kenyans have to raise 10% deposit to purchase up a house

President Ruto inspects construction of an Affordable Housing Project

Joint Committee of the Departmental Committee on Finance and National Planning & Departmental Committee on Housing, Urban Planning and Public Works has released its comprehensive report on the Affordable Housing Bill 2023, proposing significant amendments.

One of the most notable recommendations is the removal of Section 31(2a), which mandated a 10% deposit for eligibility for affordable housing units.

This change is expected to lower the entry barrier for prospective homeowners, making the dream of owning a home a more achievable reality for many.

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In a bid to ensure fairness and prevent abuse of the system, the committee has recommended amending Section 30(2c) to tie the allocation of housing units to unique identifiers, such as one Kenya Revenue Authority (KRA) PIN per house.

This move is aimed at curbing speculative buying and ensuring that the benefits of the program reach those in genuine need of affordable housing.

However, not all proposed amendments were met with approval.

The committee rejected the suggestion to base deductions on basic salary rather than gross salary, maintaining the current stance that deductions should be calculated from the gross salary.

Additionally, the proposal to extend the remittance window from the 9th to the 12th working day was also turned down, highlighting the importance of timely remittance of funds.

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The committee also upheld Section 5 of the Bill, which mandates that employers match their employees' contributions by 1.5%, noting that companies can claim the housing levy as a tax-deductible while computing income tax.

Addressing potential conflicts within the Bill, the committee has endorsed amendments to harmonize provisions targeting non-payslip Kenyans with those requiring employer matching, ensuring that compliant businesses are exempt from the obligations of Section 4(2b).

Penalties for misappropriating affordable housing levy funds are set to become more severe, aligning with the Anti-Corruption Act, reflecting the committee's zero-tolerance policy towards fund mismanagement.

Despite concerns regarding the collaboration between National and County governments, the committee believes that the current provisions, which include the Council of Governors appointing a member to the Affordable Housing Board, are adequate.

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Furthermore, the committee has proposed the creation of 47 Housing Committees, one for each county, to facilitate engagement and cooperation on housing matters, underscoring the importance of local involvement in national initiatives.

Surprisingly, the committee has rejected the idea of a mandatory waiting period between the purchase and sale of affordable housing units, a measure that was intended to curb speculative ventures.

Lastly, in a move aimed at boosting local economies and ensuring sustainability, the committee has supported the proposal that at least 50% of all materials and labor used in affordable housing projects be sourced locally, with an emphasis on standardization to maintain quality.

The report was tabled in the house for debate on February 15, 2024.

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