Affordable Housing Levy

The Affordable Housing Levy (AHL), a 1.5% mandatory contribution from both employers and employees on gross salaries. This is a key component of Kenya’s affordable housing initiative, collected by the Kenya Revenue Authority (KRA). Here’s a more detailed breakdown:Key Features of the Affordable Housing Levy:

Mandatory Contribution:

Both employers and employees are required to contribute 1.5% of the employee’s monthly gross salary.

Collection by KRA:

The Kenya Revenue Authority (KRA) is responsible for collecting the levy.

Purpose:

The levy aims to fund Kenya’s affordable housing initiative, with the goal of improving living conditions, addressing housing affordability, and stimulating economic growth.

Remittance Deadline:

The employers must remit the levy by the 9th working day of the following month.

Penalty for Non-Compliance:

A penalty of 3% of the unpaid amount is due for each month or part thereof that the levy remains unpaid.

Exemptions:

The Cabinet Secretary (National Treasury) may exempt persons or income from the levy.

Non-Salaried Persons:

The Affordable Housing Act, 2024, also mandates that any unemployed person make a 1.5% contribution of their gross income towards the housing levy.

Informal Sector:

Traders in the informal sector who fail to pay the monthly 1.5 percent housing levy risk having their bank accounts frozen and their PINs blocked.

Implementation:

The Affordable Housing Act, 2024, was passed on March 19, 2024, and the provisions for the levy came into operation on the same date.