“Attention Landlords: New Housing Levy in Effect!
Starting May 9th, landlords are now required to remit 1.5% of their gross rental income, as mandated by the Affordable Housing Act 2024.
In a recent letter dated May 6th from the Kenya Revenue Authority’s (KRA) Head of Domestic Taxes Department, North Rift Region, landlords were reminded of the monthly deadline for this levy.
The Affordable Housing Act aims to ensure contributions from all individuals towards affordable housing initiatives. KRA emphasized the importance of timely remittance, urging landlords to submit the levy by the 9th of every month.
But what exactly does this entail? The levy applies to gross rental income, sales receipts subject to turnover tax, and any other applicable sales—prior to VAT deductions.
Additionally, KRA encourages landlords to seize the opportunity presented by the Tax Amnesty program, allowing for outstanding taxes up to December 2022 to be settled by June 30, 2024.
For clarification or assistance, landlords can reach out to their account manager or visit the nearest KRA office.
But landlords aren’t the only ones affected. The Affordable Housing Act also introduces a 1.5% levy on employees’ gross salary or other income not subject to the levy. Employers are required to match this contribution for each employee.
To streamline the process, employers must declare the levy under sheet “M” of the PAYE return on iTax, generate a payment slip under “agency revenue” and “housing levy” tax sub-heads, and make payments through designated KRA channels.
And here’s a tax tip: The employer’s contribution to the Affordable Housing Levy is an allowable deduction under Section 15 of the Income Tax Act.
With these changes in effect, it’s crucial for both landlords and employers to stay informed and compliant with the new regulations. Let’s build a brighter future for affordable housing, one remittance at a time.”