Cytonn Research: Home Ownership Savings Plans in Kenya

Cytonn Research has published a series of focus notes on Home Ownership Savings Plans in Kenya.

The first paper titled Home Ownership Savings Plan “HOSP” schemes in Kenya was published in September 2019 documenting the state of HOSPs in Kenya and some of the factors that had contributed to the limited expansion of the program in the country. Home Ownership Savings Plans (HOSPs) were introduced in Kenya in 1995, and are defined as tax-sheltered savings plans created to enable individual depositors save for home acquisition or development. Despite being in existence for over two decades, Home Ownership Savings Plans are not widely implemented in the country. This was mainly because of restrictions in legislation which only allowed banks and financial institutions to manage the product.

In their second update paper published in December 2019, Cytonn noted potential shifts in implementing HOSP in Kenya following the enactment of Finance Act 2019, which expanded the scope of approved institutions that can hold savings towards HOSP to include Fund Managers and Investment Banks registered under the Capital Markets Act. Prior to this, the only institutions allowed to hold HOSP savings were banks.

The 2019 Finance Act has expanded the scope of approved institutions that can hold deposits of HOSP to include Fund Managers and Investment Banks registered under the Capital Markets Act. HOSPs are seen as holding potential for achieving Kenya’s Affordable Housing Program and the State’s Big-4 Agenda. With the inclusion of Fund Managers and Investment banks, it is anticipated that a larger umbrella of financial savings will enhance fundraising in pursuit of the affordable housing goal.

The third focus note focuses on Capital Markets Based Home Ownership Savings Plans, discussing the benefits and impediments to the implementation of capital markets based HOSPs. A number of key issues however still need to be addressed to stimulate the full involvement of capital markets in the real estate sector, and these are highlighted in this note. The note also presents the Cytonn Affordable Housing Investment Plan (CAHIP) which was launched on 21 January 2019.

 

Click here to access the notes.

Home Ownership Savings Plan, “HOSP”, Schemes in Kenya

Home Ownership Savings Plan (HOSP) Update

Capital Markets Based Home Ownership Savings Plans

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4 responses to “Cytonn Research: Home Ownership Savings Plans in Kenya

  1. stanley mutwol on 13th May 2020 at 3:56 pm

    Hello,
    My name is Stanley. Working with a church based health institution under short contracts often 3 yrs. I desire own a house and perhaps to evade taxes. I have heard about mortgages and HOSP as possible options. However, with my contractual employment it makes it difficult for me to take longer commitments. I would need further clarification on tax reliefs. I would also like to know registered institutions for HOSP. What of home improvement? how does it work?

  2. It is true that Home ownership savings plan hasn’t been utilized at all. I would like to open an account and save through it. However, I’m not certain when you can access your cash if you need it, would you clarify this for me?

  3. I would like to get information on affordable housing plan.

  4. Thank you that was helpful

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Leave a Reply

Your email address will not be published. Required fields are marked *

4 responses to “Cytonn Research: Home Ownership Savings Plans in Kenya

  1. stanley mutwol on 13th May 2020 at 3:56 pm

    Hello,
    My name is Stanley. Working with a church based health institution under short contracts often 3 yrs. I desire own a house and perhaps to evade taxes. I have heard about mortgages and HOSP as possible options. However, with my contractual employment it makes it difficult for me to take longer commitments. I would need further clarification on tax reliefs. I would also like to know registered institutions for HOSP. What of home improvement? how does it work?

  2. It is true that Home ownership savings plan hasn’t been utilized at all. I would like to open an account and save through it. However, I’m not certain when you can access your cash if you need it, would you clarify this for me?

  3. I would like to get information on affordable housing plan.

  4. Thank you that was helpful