You are eligible for a refund if you don't get a house after 7 years-Hinga
| May 30, 2023
More and more explanations into the proposed Housing levy continue to come to the fore.
Housing and Urban Planning Principal Secretary Charles Hinga now says that in the event you fail to get a house after seven year of contributing to the levy, you are eligible for a refund.
“If you save for seven years without acquiring a house then you can withdraw. You can also transfer that money from the housing fund to your retirement scheme without being taxed,” Hinga stated.
Hinga added that individuals who wish to withdraw a lump sum from the savings after seven years will be taxed.
“If you withdraw cash from the savings then it will be taxed, because this money aims at dealing with urbanization, housing shortage and employment. The money is no different from the pension,” he is quoted saying in an interview with NTV.
The Government aims to deduct Sh2500 from the basic salary to contribute to the housing fund, while the employer tops up with an equal amount.
Hinga further stated that the Ministry is in a process of setting up regulations that facilitate the refunds.
“In case one withdraws from the contribution, then you will be refunded…but the one made by your employer shall remain in the fund for seven more years,” he said.
The bill is currently before the National Assembly, and if passed, it will require employees and employers to contribute three per cent of their income towards the National Housing Scheme.
The bill has attracted huge criticism across the political divide and some civil servants.
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BUSINESSBy Macharia Kamau