Kenya’s affordable housing sector is entering a more expensive era after the Finance Act 2026 withdrew key tax incentives that had underpinned the industry’s economics for years.
Effective July 1, developers have lost both the reduced 15 percent corporate income tax rate and VAT exemptions on construction inputs, forcing many to recalculate project costs midway through the financial year.
The corporate tax change is particularly significant. Since 2017, developers constructing at least 100 residential units annually paid corporate tax at 15 percent instead of the standard 30 percent.
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