Teachers, civil servants and other employees will from 1st July 2023 face deduction of 1.5 per cent from their gross salaries.
Initially, President William Ruto had proposed a mandatory 3 per cent housing levy contribution that would be matched by employers at the same rate but combined contributions capped at Sh5,000.
However, with the new house levy, employees will make a 1.5 per cent contribution of their monthly gross pay while employers will pay nothing.
This means teachers will contribute 1.5 per cent from their payslips but Teachers Service Commission (TSC) will pay nothing.
Members of Parliament (MPs) on Wednesday voted to retain the 1.5 per cent Housing Levy.
The total of 256 MPs took part in the voting on Wednesday night.
Out of the 256 MPs, 184 members were in favour of the 1.5 per cent for Housing Fund while 72 MPs voted against the amendment.
Voting was preceded by heated debate on the proposed housing levy with Minority Leader Opiyo Wandayi saying people have other big problems they are dealing with and housing wasn’t one of them.
“Housing Levy will be a scandal in waiting. Without the framework, infrastructure and mechanism to administer it, we are basically throwing good money after bad money,” he said.
Majority leader Kimani Ichung’wah countered his argument saying the country should address people who live in slums the way it addresses lack of food.
“We need to deal with the scandalous adventures of millions of Kenyans who are living in slums and deal with Kenyans going about without food. We are worrying about shelter and food at the same time,” Ichung’wah said.
The Housing Fund proposal has drawn mixed reactions from leaders and Kenyans.