The Court of Appeal in Kenya has upheld the constitutionality of the Affordable Housing Act, dismissing an appeal that challenged the law and deductions made under the housing levy. In a judgment delivered on September 25, 2026, in Nairobi, the court found no merit in the appeal and upheld the High Court's determination on most of the issues raised by the petitioners. This decision allows the Affordable Housing Act to continue being implemented.
The court, however, identified an issue with the process used in enacting the law. A three-judge bench faulted the process, stating that the Commission on Revenue Allocation (CRA) should have been given an opportunity to consider the Bill and make recommendations before it was debated and passed by Parliament. The judges noted that the Affordable Housing Act provides for the collection of funds through the Affordable Housing Fund.
According to the court, Article 205 of the Constitution requires that when a Bill includes any financial matter concerning county governments, the Commission on Revenue Allocation shall consider those provisions and may make recommendations. The judges rejected the High Court's interpretation that the CRA's role would arise only during implementation of the Act. They stated that Article 205 requires the CRA's input before the Bill is discussed in Parliament.
Despite this, the court observed that the CRA had not been made a party to the proceedings, making it difficult to establish whether it had actually been denied the opportunity to consider the Bill. The judges said, "The CRA was never made a party to the proceedings and hence its position as to whether or not this opportunity was afforded was not clearly brought out." This made it challenging to determine the impact of the CRA's non-involvement.
The Court of Appeal also upheld the retrospective application of the Affordable Housing Act. The judges found that Section 60 of the Act was intended by Parliament to apply retrospectively in order to preserve transactions that had taken place under Section 84 of the Finance Act 2023 before the High Court's determination in Petition 181 of 2023.
The court further upheld the appointment of the Commissioner General of the Kenya Revenue Authority as the collector of the housing levy. It relied on the Kenya Revenue Authority Act, which provides for the Authority to act as the government's agent in collecting and receiving revenue. The judges found that the appointment of the Commissioner General to collect the levy could not be faulted.
In its final orders, the Court of Appeal dismissed the appeal, finding no merit in it. The court upheld the High Court's determination on most issues, allowing the Affordable Housing Act to continue being implemented. The decision was delivered on September 25, 2026, in Nairobi.
Key points
- The Court of Appeal upheld the constitutionality of the Affordable Housing Act.
- The court identified an issue with the process used in enacting the law.
- The court upheld the retrospective application of the Affordable Housing Act.
