Kenya's Court of Appeal upholds Affordable Housing Act and 1.5% payroll levy
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Kenya's Court of Appeal has dismissed 42 consolidated appeals against the Affordable Housing Act, 2024, upholding the law and the mandatory 1.5 per cent payroll levy that funds the government's housing programme.
Kenya's Court of Appeal dismissed 42 consolidated appeals challenging the Affordable Housing Act, 2024 on Friday, September 25, 2026, upholding the legislation and the mandatory 1.5 per cent payroll levy that funds the government's affordable housing programme.
A five-judge bench comprising Justices Wanjiru Karanja, Patrick Kiage, Aggrey Muchelule, William Korir and George Odunga found no merit in the petitions, which were filed by Busia Senator Okiya Omtatah, Nakuru-based surgeon Dr Magare Gikenyi and several other petitioners.
"Having considered the submissions made, we find no merit in this appeal, which we hereby dismiss. Taking into account the public interest nature of the litigation, we make no order as to the costs," the bench ruled.
The court found that the Act satisfied constitutional requirements on public participation and that the levy did not amount to unlawful discrimination. The decision came shortly after the same court dismissed Senator Omtatah's separate appeal against the construction of affordable housing on county and ministry land, ruling that there had been adequate public participation.
President William Ruto signed the Affordable Housing Act into law on March 19, 2024, paving the way for the levy, under which employers and employees each contribute 1.5 per cent of an employee's gross salary towards the programme. In October 2024, a three-judge High Court bench comprising Justices Olga Sewe, John Chigiti and Josephine Mong'are held that the Act had been properly enacted and was in accordance with the Constitution after considering six petitions.
The ruling comes as the government faces a funding shortfall in the programme. Housing Principal Secretary Charles Hinga said earlier this month that the levy currently raises about Ksh6 billion every month, but that collections alone cannot meet the target of constructing 200,000 units annually. He said the government is exploring long-term financing options with international development partners, including the World Bank, to bridge the gap.