Housing Fund Levy Set to Take Effect Next Month

Posted on April 16th, 2019

By Geoffrey Muchiri | Georgina Ogalo-Omondi

The Principal Secretary in the Ministry of Housing and Urban Development has today announced the coming to effect of the Housing Fund Levy (the levy) introduced, under the Finance Act, 2018.

The employer and the employee shall each be required to contribute 1.5% of the employee's monthly basic salary to a maximum of Kenya Shillings Five Thousand (KES 5000). Voluntary contributions will also be accepted to the scheme at a minimum of Kenya Shillings Two Hundred (KES 200) per month.

According to the notice, the levy shall fall within other payroll statutory deductions such as PAYE, NSSF and NHIF that are deducted by an employer every month. The first contribution shall be due by May 9th 2019.

The purpose of the levy is to finance the Affordable Housing Scheme under the Big 4 Agenda which will enable employees to purchase a home under the scheme, transfer the contributions to a pension scheme, transfer the contributions to another person under the scheme or, as cash to self, spouse, or a dependent child.

We shall update you as this matter unfolds.


Should you require further information on this subject please contact Geoffrey Muchiri (Partner) or Georgina Ogalo-Omondi(Partner).

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