Every taxpayer has a right to an affordable house as long as they are making contributions under the Affordable Housing Programme (AHP) in the country. Affordable housing means homes that people with middle incomes or lower incomes can afford to buy without spending too much money. In this article, we will explain what affordable housing contributions are and the steps to apply for a house.
In the last few years, the government of Kenya has had a program to ensure more people can afford homes through the Affordable Housing Programme (AHP). This program provides affordable housing at lower prices than what is available in the market. It also allows people to pay for the house over extended periods.
Why is affordable housing important?
Many people have wondered whether the government initiative for the affordable housing program is necessary. Anything the government can provide at an affordable price will go a long way to help the people. There are many benefits of affordable housing.
Some of the benefits of affordable housing are:
- The houses will help families spend less on rent.
- Many families will own house properties.
- The opportunity for homeownership will provide security and stability for the family in the future.
- People can access home loans because the government will work with banks to offer flexible payment plans.
By making affordable housing available, the government will help improve the living conditions of many families and promote economic growth in the country.
The question has been whether the affordable housing contributions are a tax or a levy. It is important to understand the meaning of the two terms.
What is Tax?
Taxes are money that people and businesses must pay to the government. The government collects taxes to fund development projects like schools, roads, and hospitals. Taxes are also used for recurrent expenditures like salaries, debt, etc. Without taxes, the government would not have enough money to support the country’s development and provide public services.
In Kenya, there are many taxes that the government collects. The Kenya Revenue Authority (KRA) manages tax collection in the country. Taxes are necessary in the country because they help the government provide affordable housing and other essential services.
Here are some of the different types of taxes that the government collects:
- Income tax – People who earn money, whether from employment or other sources, must pay a part of their salary or income to the government as income tax.
- Value-Added Tax (VAT) -VAT is a consumption tax levied on valuable products. It is a tax added to goods and services when people buy them.
- Corporate tax – Businesses pay tax on their profits.
- Excise duty – A tax on importing and consuming specific goods and services like fuel, alcohol, and tobacco in the country.
What is a Levy?
A levy is a special type of tax collected for a specific purpose. In Kenya, the government introduced the Affordable Housing Levy to raise money for housing projects. This levy is deducted from employees’ salaries, and employers also contribute.
Why is the Affordable Housing Levy Necessary?
There are many benefits of an affordable housing levy.
- It provides money to build affordable housing.
- The funds ensure long-term housing projects.
- It helps many people access affordable housing.
Are affordable housing contributions tax or levy?
Unlike regular taxes, affordable housing contributions should be strictly used for housing projects to ensure that more homes are built for Kenyans. This means that the contributions are a levy. However, this is a special type of levy because the contributors can apply and be allocated a house.
After the government has constructed the houses, every Kenyan contributor can apply for an allocation. The government has made it easy for citizens to apply for affordable housing. This is through a simple online process. Here are the steps to follow:
Process of Applying for an Affordable House in Kenya
After the government has constructed the houses, every Kenyan contributor can apply for an allocation. The government has made it easy for citizens to apply for affordable housing. This is through a simple online process. Here are the steps to follow:
1. Save and Contribute to the Housing Fund
To benefit from the affordable housing program, you need to be a contributor. You start by doing the following:
- Start saving in the housing fund.
- Employees’ contributions are deducted from salaries.
- Self-employed individuals can contribute directly.
- Register on the Boma Yangu Portal
You cannot apply for an affordable house unless you have registered:
- Visit www.bomayangu.go.ke and create an account.
- Provide your National ID number and KRA PIN.
- Registration allows you to apply for affordable housing units.
- Choose a Housing Unit
Once you log in to www.bomayangu.go.ke take these three steps:
- Browse the available, affordable housing options on the portal.
- The sizes of houses range from three-bedroom, two-bedroom, and one-bedroom units.
- Select the home size that fits your budget and needs.
- Allocation and Balloting Process
- There is a high demand for the houses. A balloting system is used to allocate the houses fairly.
- If selected to be allocated a house, you will receive an offer letter and proceed to make with payment.
- Payment and Ownership Transfer
When one applies for an affordable house, they have to pay for it. There are payment options available for affordable houses. Those include:
a) Mortgage financing – Paying in small amounts over time.
b) Tenant purchase schemes – Paying rent that counts towards homeownership.
c) Outright purchase – Paying the full amount at once.
Once the full payment is made, ownership documents are issued to the purchaser.
Benefits of Affordable Housing
There has been debate on whether affordable housing benefits Kenyans and the country. Every coin has two sides. The following are some of the benefits of affordable housing:
1. Lower housing costs – The government support and intervention will reduce the price of homes.
2. Improved living conditions – More people who previously could not afford decent housing can now own quality homes.
3. Long-term investment – The house investments are long-term, and the property values will increase over time.
4. Flexible payment options—Many people who previously could not access a mortgage will now be able to with government support. Mortgage and savings programs make homeownership easier.
5. Job creation – The construction of affordable housing will create employment for many jobless Kenyans.
Challenges of Affordable Housing in Kenya
All projects have challenges irrespective of the project promoters. Despite the government’s efforts, affordable housing faces many challenges. Some of those challenges are:
a) High demand – More people want houses than the available units.
b) Construction delays – Some of the projects are taking longer than expected, thus delaying the availability of the houses.
c) Lack of awareness – Many Kenyans do not know how to apply for affordable housing.
d) Financial constraints – Some Kenyans struggle to save enough money for a house.
Final Thoughts
Affordable housing is a significant initiative by the Kenyan government to help citizens own homes. Understanding taxes and levies is important because affordable housing funds help build affordable homes. The contributions are a special levy. The Affordable Housing Programme provides savings options, flexible payment plans, and government support.
If you want to own a home under the affordable housing program, you must register on the Boma Yangu portal, start saving, and follow the simple application process when you need a house. Affordable housing is an excellent way for Kenyans to secure a home and build a better future.
By taking advantage of Kenya’s affordable housing program, many families can move from renting to homeownership. This will ensure more people can live in safe, decent homes while securing long-term investments.
Don’t wait until the deadline! Visit www.bomayangu.go.ke today and apply for your affordable house!
