President William Ruto on Tuesday signed into law the Affordable Housing Bill.
This was after the Bill was passed by both Houses of Parliament.
As such, Kenyans will now pay 1.5 percent of their pay to the government starting this month.
Employers will also be expected to match the contribution.
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The Bill was passed with several amendments including bringing county governments to the fold.
The bill establishes four components of Affordable Housing, including the Social Housing Unit for persons earning less than Sh20,000, Middle Class for people earning above Sh49,000, General Affordable Housing for those earning between Sh20,000 to Sh149,000 and Rural Housing for those living outside urban areas.
Some of the institutions that will be mandated with implementing the Housing project include the Ministry of Housing, National Housing Corporation (NHC), County governments, and Private entities as approved by the fund’s management body; the Affordable Housing Board.
The Bill also notes that priority will be given to slum areas.
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Construction materials as well as labour will be sourced locally.
The levy had been declared unconstitutional by the High Court in 2023.
Later, the Court of Appeal upheld the decision maintaining that the levy was introduced without a legal framework.