Plans to reduce building levies good news for developers

Real estate developers might soon get a reprieve if plans to halve certain levies and zero-rate some building materials are adopted.

But they have at the same time been asked to build more affordable houses to enable low-income earners to own homes.

Lands, Housing and Urban Development Cabinet Secretary Prof Jacob Kaimenyi said that, with statistics showing that 75 per cent of the country’s population earning less than Sh25, 000, it would be difficult for them to afford their own homes due to the current high costs.

“If you put up houses in the region of Sh600,000 to Sh1.1 million, then those Kenyans who earn less than Sh25,000 a month might afford them,” he said.

The CS said the government had completed building 722 affordable houses in Kibera Zone A, which would cost Sh600, 000 for a one-bedroom unit, with another 3,500 units set to be put up in Kibera Zone B.

Meanwhile, 66 per cent of the urban population live in rented houses, creating a huge demand  for housing in urban centres.

 “We are also putting  up houses for the police and the prison officers at a cost of Sh1.1 billion and our aim is to build 150 police houses as a first step,” he said.

The CS said there was a demand for  95,000 houses by the disciplined forces, which was a tall order for the government to meet alone and called on the private sector to chip in.

In an effort to increase incentives to encourage the construction of more low-cost houses by the private sector, Prof Kaimenyi said, the ministry is in talks with the Treasury to zero-rate import duty on alternative building materials like expandable polystyrene boards (EPS), which is gaining popularity in the country.

The levy charged  by the National Construction Authority would also be slashed by half if proposals are adopted in the Finance Bill.

“As the private sector continues to provide housing, we are alive to the fact that we have to create a conducive environment at the micro and macro levels,” said Prof Kaimenyi.

He said the ministry had also formed a “contact group”, which has been tasked with addressing the concerns raised by the sector players.

“We want to have a one-stop shop for all levies, and that those levies be reduced and capped,” added the CS.