Majority Leader and Kikuyu Member of Parliament Kimani Ichung'wah has tabled a bill to create a legal framework to oversee the affordable housing levy.
This comes after the High Court declared the tax enshrined in the 2023 Finance Act unconstitutional and discriminatory.
Meanwhile, the Affordable Housing Bill 2023 proposes the establishment of the Affordable Housing Fund, where money collected from Kenyans shall be diverted to President William Ruto's legacy project.
"The bill's principal object is to provide a legal framework for the establishment of the Affordable Housing Fund, access to affordable housing. It will impose the Affordable Housing Levy to finance the provision of affordable housing and associated social and physical infrastructure," Ichung'wah states.
Ichung'wah lists three products, Social Housing, Affordable Housing, and Affordable Market Housing, charged depending on a taxpayer's income.
Notably, the social housing units will be between 18 and 20 square metres for Kenyans earning below Ksh20,000, while the affordable housing units will be between 36 and 80 square metres for Kenyans earning between Ksh20,000 and Ksh140,000.
The affordable market housing unit will occupy at least 60 square metres targeting Kenyans earning over Ksh150,000.
According to the Kikuyu MP, the levy shall be charged at the rate of 1.5 per cent of the employee's gross salary. Kenyans will be required to remit the money on the ninth day after getting their salary.
There will be a three per cent fine for late payment of the funds or the government will consider it as a civil debt.
Some of the requirements for allocation of a unit include having a Kenyan citizen over 18 years, having a copy of their identity card, the Kenya Revenue Authority (KRA) pin, and other relevant documents as required.
"In determining the allocation of an affordable housing unit under this section, the relevant agency shall give preference to marginalised persons, vulnerable groups, youth, women and persons with disabilities," reads part of the bill.
Under the bill, Kenyans will also be able to take loans to buy affordable homes with interest rates ranging from three to nine per cent, depending on the person's income.
To ensure members managing the Fund do not misappropriate the money saved by Kenyans, the bill proposes a Ksh10 million fine or a jail term of five years or both.
