KENYA Trends and Developments Contributed by: Lorna Mainnah, Joseph Omwenga, June Lomaria and Herbert Karanja, Dentons Hamilton Harrison & Mathews
for the development of affordable housing units. The Fund will, among other functions, provide low-interest loans or low-monthly-payment home loans for acquisition of the affordable housing units. The Fund will be managed by the Affordable Housing Board (the “Board”). Under the AHA, the Board will present a five-year affordable housing investment programme every five years for approval by the Cabinet Secretary of the National Treasury and Parliament. The following eligibility conditions apply for an affordable housing unit. • Only natural persons are eligible for allocation of one housing unit. This means that compa - nies, savings and credit co-operative organi - sations, and partnerships are not eligible. • A person owning an affordable housing unit is not allowed to sell their unit except with the written consent of the Board. Tax relief and deductions are allowable under the AHA as follows. • Tax resident individuals who pay the Levy are entitled to affordable housing relief of 15% of their contributions subject to a cap of KES108,000 per annum. • Amounts contributed to the Fund are allow - able deductions by employers and business - es under Section 15 of the Income Tax Act, thereby reducing overall taxable income. Private investors in the Affordable Housing Programme are also offered the opportunity to develop and construct affordable housing units along the following lines.
• They may supply goods and materials in connection with the construction of afford - able housing units by way of an agreement between the investor and the Board. • Prior to entering into an agreement, the Board will first be required to invite tenders from the public in at least two national newspapers. • The Cabinet Secretary will prescribe guide - lines on the tendering process. Conclusion The AHA marks a step towards achieving afford - able housing in Kenya. It also presents a viable opportunity for private investors to invest in the affordable housing programme. Its effectiveness will nonetheless require streamlined co-ordina - tion, financial prudence, and effective stakehold - er engagement if the benefits are to be realised. Currently, the AHA is facing legal hurdles as a case has been filed in the High Court of Kenya seeking to quash it in its entirety. The Real Estate Regulation Bill, 2023 The Real Estate Regulation Bill, 2023 (the “Bill”) is a bill of Parliament that seeks to provide a mechanism for regulating the registration of real estate agents, land companies and developers. Its objective is to protect real estate purchasers and curb the rampant fraud within the sector. The Bill is yet to be passed into law and is cur - rently at the second reading stage in Parliament. The key provisions of the of the Bill cover the following. • Creation of the real estate board (the “Board”), which will be responsible for licenc - ing and regulation of real estate agents and developers.
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