The 2023 Finance Bill introduces a compulsory levy payable by employees and employers to finance the National Housing Development Fund (NHDF). Managed by the National Housing Corporation, the NHDF aims to finance the construction of affordable housing for low- and middle-income households. The bill was signed into law on June 26, 2023.
According to the NHDF, approximately 200,000 new homes are needed annually, but actual production is roughly 50,000 units. This puts significant pressure on housing costs in urban areas, with prices doubling since 2004. The NHDF was established in 2018, but prior attempts to require employer and employee contributions to finance it were thwarted by multiple legal challenges. To avoid a similar outcome this time, funding was changed from a contribution to a payroll tax levy in the final 2023 legislation. Employers should work with their payroll providers in preparation for the new tax.