Kenya's Court of Appeal has dismissed 42 consolidated appeals challenging the Affordable Housing Act, 2024, upholding the legislation and the mandatory 1.5% payroll levy that funds President William Ruto's housing programme. A five-judge appellate bench delivered the ruling on Friday, September 25, 2026, finding no merit in petitions filed by Busia Senator Okiya Omtatah, Nakuru-based surgeon Dr Magare Gikenyi, and several other petitioners.
The court found that the Act satisfied constitutional requirements on public participation and that the levy did not amount to unlawful discrimination. The Housing Levy requires both employees and employers to contribute 1.5% of an employee's gross monthly salary to the Affordable Housing Levy, with the pooled funds directed towards mass housing construction across Kenya.
The court rejected arguments that key provisions of the Act were too vague to be enforced. It also upheld the retrospective application of Section 60, ruling that Parliament had intended to protect transactions and projects that had already commenced under the earlier housing levy framework.
A central challenge in the consolidated appeals concerned whether Kenyans were given a genuine opportunity to participate in the legislative process before the Act was passed. Petitioners contested the geographical scope of public consultations, among other concerns. The appellate bench dismissed those arguments, concurring with the High Court's earlier finding that the process met constitutional standards.
On the use of public land for housing projects, the court ruled that the National Land Commission holds a central role in any such allocation. The judges, however, declined to rule on speculation that public land would be improperly allocated under the programme.
The dispute traces its origins to 2023, when the original Affordable Housing Levy was introduced through the Finance Act, 2023. The High Court struck it down, finding it lacked a comprehensive legal framework and was discriminatory. The government responded by introducing standalone legislation, which President Ruto assented to on March 19, 2024.
The decision provides significant legal certainty for the government's housing agenda, securing uninterrupted payroll deductions and sustained capital flows for ongoing construction projects. The court made no order on costs, acknowledging the public-interest character of the litigation.
Key points
- The Court of Appeal upheld the Affordable Housing Act, 2024, and the mandatory 1.5% payroll levy.
- The court ruled that the National Land Commission must approve any allocation of public land for affordable housing projects.
- The decision secures uninterrupted payroll deductions and sustained capital flows for ongoing construction projects.
