The government will start deducting 1.5 percent housing levy from all employees in the public and private sector beginning March 1.
Transport, Housing and Infrastructure Cabinet Secretary James Macharia said the affordable housing project will be implemented after successful talks with workers’ union and employers.
“We had injunctions that halted the process but the parties have agreed to withdraw them so we are ready to proceed with the project,” Mr Macharia said.
The Transport CS said the project will be launched in a few weeks and the first 2,000 housing units will be built on Nairobi’s Park Road.
Addressing concerns over the levy, he said that those who do not benefit from the housing project will get their money back at retirement.
“Those who do not get a house or already have one will get their money back when they retire. The only money that will not be refunded is the employers’ deduction,” Mr Macharia said.
The tax scheme is expected to generate about Sh57 billion annually from about 2.5 million salaried Kenyans. Additional revenue is expected to come from voluntary contributors.
Although the initial plans projected the construction of half a million houses, CS Macharia said that local and international developers have expressed interest in putting up to a million units. The project is estimated to cost up to Sh1.5trillion.