• This is a levy contribution introduced by the government to fund its plan to provide affordable houses for Kenyans.  
  • The imposition of the Housing Levy is anchored in the Affordable Housing Act, 2024 (AHA) which was assented into law by the President on 19th March 2024. 
  • The new Act incorporates amendments to the Affordable Housing Bill, 2023 which include mandatory contributions from non-salaried workers in the informal sector, participation of county governments, removal of a contribution cap, and the inclusion of a clause that one person may only access one unit. 


  • An employer is obligated to deduct and remit 1.5% of an employees’ gross salary as well as the employers’ contribution at 1.5% of the employees’ gross salary.  
  • Persons not in employment but in business are also required to pay the levy at the rate of 1.5% of their monthly gross income as from 19th March 2024. 


  • The Kenya Revenue Authority (KRA) Is the collecting agent of the Affordable Housing Levy.   
  • As per KRA guidelines, the effective collection date starts from Tuesday 19th March 2024. However, and contrary to the date of operationalization of the law, the iTax platform requires employers to remit as from 1st March 2024.  
  • The due date to remit the housing levy is the 9th working day of the following month in which the gross salary was due or gross income was received or accrued. 
  • Any person who fails to comply with the law shall be liable to payment of a penalty equivalent to 3% of the unpaid funds for every month if the same remains unpaid. 


KRA directed all employers to: 

  • declare the Housing levy under sheet “M” of the Pay as You Earn (PAYE) return on itax;  
  • generate a payment slip under the tax head “agency revenue” and tax sub-head “Housing Levy”; and  
  • make payments at KRA agent banks or mobile money through eCitizen Paybill Number 222 222 or by dialling *222# 


  • Expenditure incurred by any person carrying on business in payment of the Levy will be a deductible expense for purposes of determining that person’s taxable income under the Income Tax Act. 
  • A resident individual who has paid the Levy in a year of income shall be entitled to the affordable housing relief when computing the individual’s taxable income under the Income Tax Act.  
  • The current affordable housing relief is 15% of the employee’s contribution subject to a cap of KES 108 000 per year. 


  • A Petition has been filed before the High Court seeking orders to temporarily suspend the commencement, levying, operationalisation, and effecting of the AHA. However, the court declined to issue conservatory orders therefore the implementation of the AHA continues until the Petition is determined. 

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