Housing Regulations 2024 Propose Some Exemptions, Restricted Sales

Kenyans wishing to let go of the affordable housing units courtesy of the government may not find it easy following newly introduced regulations meant to provide some clarity on Section 54 of the Affordable Housing Act 2023.

The regulations contained in the Draft Affordable Housing Regulations 2024 bar homeowners from selling their affordable housing units until eight years after completing their payments in full.

Should anyone meet this requirement upon lapse of the eight years, he or she intending to sell their unit will be required to obtain written consent from the Affordable Housing Board before proceeding with any sale.

“An application for consent to sell an affordable housing unit under regulation 31(3) shall be made, in writing, to the Board indicating the reasons for the request.

“Upon receipt of an application under this regulation, the Board shall make a determination and within fourteen days of making the decision, notify the applicant of its decision,” the regulations read in part.

On its part, while deciding, the Board shall take into consideration whether the owner has been the proprietor of the affordable housing unit for at least eight years; and if the price at which the affordable housing unit is being offered for sale is within the prevailing market price. The Board has 14 days to make this decision.

It is worth noting that the Affordable Housing Board must be accorded the right of refusal for any unit that is being sold by an owner and that it has the priority of purchasing any affordable unit on sale.

Furthermore, the affordable housing unit shall only be sold to a person eligible to own the respective housing unit under the Affordable Housing Act.

The regulations might come in handy for Kenyans who may encounter life circumstances that would prompt them to seek better shelter for themselves after living in affordable housing units.

Defaulting on Payments for Affordable Housing

Meanwhile, Kenyans who default in payments of their affordable housing units for four months risk having their units repossessed and reallocated to another eligible applicant.

“Where a person fails to remedy the default as required under sub-regulation (2) for four consecutive months, the Board shall take possession of the affordable housing unit, may reallocate the affordable housing unit to another eligible person in accordance with these Regulations, may change the person's affordable housing unit to a lower value unit in accordance with regulation 13 or may enter into a restructuring arrangement with the person in default,” add the regulations.

For being allocated a lower-value unit, this can only happen if the payments one has already made cover the purchase price of the lower-value unit.

The defaulter also has to meet the allocation criteria specified for the lower value unit, provided that the defaulter has not entered into a loan restructuring arrangement in accordance with the Act.

Exemptions From Housing Levy

The 2024 Affordable Housing regulations also give the green light for certain individuals to be possibly exempted from paying the Housing Levy.

“A person or category of persons may be exempted from the payment of the Levy where that person is exempted from the imposition of taxes under an international agreement or a host country agreement to which Kenya is a part of,” add the regulations.

Additionally, an income or a class of income may be exempted from the levy where the income is derived from the pension or gratuity paid to a person upon the termination of a contract; a reimbursement of medical expenses or travel and accommodation expenses for work-related activity; or derived from an insurance compensation and exempt from levy or income tax under an Act of Parliament.

An application for exemption under the regulations in this case shall be made in writing to the Cabinet Secretary specifying the reasons for the request for exemption and accompanied by the tax clearance certificate of the applicant.

Public Participation

The public has been invited to voice their opinions on these regulations, with the government announcing that the public consultation period is open until April 29, 2024, at 5.00 pm.

Kenyans are encouraged to submit feedback via written memoranda or through attending in-person forums across the country.