Companies to contribute up to Sh5,000 per employee towards new housing fund: Rotich

June 14, 2018
Kenya is estimated to have a housing deficit of over 2 million units with the bulk of urban population living in slums. World Bank estimates that on average, only 50,000 units are added to the market annually/FILE

, NAIROBI, Kenya, Jun 14 – Treasury has proposed the amendment of the employment act to compel employers contribute a maximum Sh5,000 to the National Social Housing Development fund of every employee, while employees will contribute 0.5 percent of their gross salary.

National Treasury Cabinet Secretary Henry Rotich says the government will establish the fund and strengthen the national housing corporation to more strategic roles.

Rotich, who was presenting the budget statement to parliament, allocated Sh3 billion for construction of affordable and social housing units by the Government.

The CS says the newly constituted Kenya Mortgage Re-Finance Company has been established with a view of extending long term loans to financial institutions secured against mortgages which will be jointly owned by the government, the private sector and select development partners.

“Every Kenyan has a right to decent shelter. To meet this requirement, we plan to increase the supply of affordable houses by partnering with the private sector to develop homes in serviced land. This will require reforms in property registrations, access to affordable financing and adoption of new low-cost building technologies, which we are prepared to undertake under “The Big Four” Plan,” Rotich told parliament.

Additionally, the government has reduced corporate tax rate in the housing sector to 15 percent for developers who construct at least 100 units per year.

Additionally, Sh1.5 billion has been allocated towards the construction of housing units for police and Kenya prison officers.

“We have also provided Sh1.5 billion for the Civil Servant Housing Scheme Fund to support the offtake of the housing units.”

The government has also promised to provide infrastructure and utilities to urban land owned by both National and County Governments and invite the private sector to develop affordable housing units.

To this end, the government will restructure the Kenya Urban Support Programme, Kisumu Urban Project and Nairobi Metropolitan Services Improvement Project, to provide Sh18.4 billion to support the servicing of land in various towns in the country to bring in private developers into the affordable housing programme.

Housing is one of the biggest winners in this year’s budget allocations alongside manufacturing, universal health care and food security.

He says government resources have been structured to support the four priority areas with projection of at least 7 percent GDP growth over the medium term creating job creation and reducing poverty.

Latest Articles

Live prices

Stock Market

Most Viewed