Salaried workers will not be forced to contribute 1.5 per cent of their salary to the National Housing Development Fund under proposed new regulations.
The National Housing Development Fund Regulations, 2020, currently undergoing public consultation, propose a minimum monthly contribution of Sh200 to the fund.
Before the new proposals, the Finance Act 2018 required workers to contribute 1.5 per cent of their salary monthly to the fund, provided the total contribution did not exceed Sh5,000.
In a statement on Thursday, Transport and Housing CS James Macharia said public consultations on the regulations had been extended for a week to facilitate further engagement and receipt of public views due to the Covid-19 pandemic.
“The ministry, through the State Department for Housing and Urban Development, invites members of the public to take advantage of the extension of the public participation deadline so that their views can be incorporated in finalising the regulations,” Macharia said.
Public Participation is expected to close next week on Tuesday. Thereafter the regulations will be tabled before Parliament for adoption.
“Notwithstanding the above contributions, in order to qualify for a house in the Boma Yangu affordable housing programme, a member shall need to have contributed 10 per cent of the price of the house they wish to buy with no time limit specified to attain the threshold,” the statement said.
According to the new regulations, a deceased member’s contribution shall be paid to the dependants with interest.
The new changes came months after President Uhuru Kenyatta directed the National Treasury and the Department of Housing to make the necessary changes to the Housing Fund Levy and table them before Parliament for passage.
“The regulations currently specify that a member shall contribute either in a lump sum or the prescribed minimum of Sh200 to the Housing Fund, which shall be immediately credited to the member’s individual account,” Macharia said.
Affordable housing is one of Uhuru's ambitious Big Four Agenda to provide 500,000 houses by 2022, but court cases by outfits like FKE and Cotu have stalled its implementation.
Over 225,000 Kenyans have registered through the bomayangu.co.ke platform. Initial construction sites for the new housing units are in Park Road and Pangani in Nairobi.
The houses will be provided at interest rates of between three per cent for social housing and five to seven per cent for low cost and mortgage gap segments respectively.
They have a repayment period of between 20 to 25 years for either affordable mortgages or the tenant purchase schemes.
Edited by Henry Makori
