Housing Levy Upheld: What Court of Appeal Ruling Means

By the 254.ke Newsroom.

Kenya’s Court of Appeal has upheld the Affordable Housing Act, 2024, and with it the 1.5 percent Affordable Housing Levy deducted from salaried workers’ pay. A five-judge bench ruled on September 25, 2026 that the appeal, which consolidated 42 challenges, had “no merit.” Deductions continue as before, and refunds of amounts already collected were rejected.

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What did the Court of Appeal decide on the housing levy?

The bench of Justices Wanjiru Karanja, Patrick Kiage, Aggrey Muchelule, Weldon Korir and George Odunga found that the Act was properly enacted, with adequate public participation. It also held that the levy advances the constitutional right to accessible and adequate housing.

The judges rejected arguments that the levy discriminates against salaried workers or is a function reserved for county governments, according to reports by Kenyans.co.ke and the Rio Times. No costs were awarded because of the public-interest nature of the case.

Key facts at a glance

Ruling date: September 25, 2026
Law upheld: Affordable Housing Act, 2024 (signed March 19, 2024)
Levy rate: 1.5% of gross salary from the employee, matched by 1.5% from the employer (3% combined)
Foreign staff: Employees on Kenyan payroll remain covered, with no exemption
Refunds: Claims for previously collected amounts were denied
Collections: About Sh6 billion a month, reported to fall short of programme needs

Who challenged the law, and what happens next?

Petitioners included Busia Senator Okiya Omtatah and Nakuru surgeon Dr Magare Gikenyi, who argued the levy forces salaried Kenyans to fund homes they may never receive. Gikenyi has said he will take the matter to the Supreme Court, though no filing had been confirmed in the reports reviewed as of September 29, 2026.

The ruling follows a 2023 High Court decision that struck down the original levy in the Finance Act for lacking a sufficient legal framework. Parliament then passed the standalone Affordable Housing Act in March 2024.

Will my salary deductions change?

Not because of this ruling. Payroll deductions stay at 1.5 percent of gross pay, and employers continue to remit their matching share. Anyone who hoped for a refund of past contributions will not get one under this decision unless the Supreme Court later rules differently.

The government has said current collections do not cover the programme’s funding needs and is exploring long-term financing with international partners, including the World Bank. For related developments, see our earlier coverage of Affordable Housing prices rising on Oct 1 and the 1,800-unit Ngara housing project. The Act itself is available from the Kenya Law database.

FAQ

Is the housing levy legal in Kenya?

Yes. The Court of Appeal ruled on September 25, 2026 that the Affordable Housing Act, 2024 is constitutional.

How much is the affordable housing levy?

Employees pay 1.5% of gross salary and employers add a matching 1.5%.

Can I get a refund of housing levy already deducted?

Not at present. The court upheld the law’s retroactive application and denied refund claims.

Can the ruling be appealed?

Dr Magare Gikenyi has said he will petition the Supreme Court; no filing had been confirmed at the time of writing.

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