Affordable Housing Levy Stays After Kenya Appeal Ruling

In Short

Kenya’s Court of Appeal has upheld the Affordable Housing Levy. That means the government can keep collecting it. The 1.5% employee and 1.5% employer deductions remain unchanged.

What Happened

The Court of Appeal delivered its ruling on September 25, 2026. It dismissed appeals that were challenging the Affordable Housing Levy law.

This keeps the levy in place. The levy is a mandatory payroll deduction used to fund the government’s affordable housing programme.

Under the current structure, employees contribute 1.5% of their gross salary. Employers add another 1.5% on top of that.

The legal challenges raised several issues. These included how the Affordable Housing Act was passed, how public participation was handled, and whether the Kenya Revenue Authority should collect the levy.

The judges also flagged a concern about the Commission on Revenue Allocation (CRA). The court said CRA should have had a chance to consider the Bill because it could affect county government finances. Even with that concern noted, the court still dismissed the appeals.

Why It Matters

For employees and employers, the immediate impact is simple. Payslip deductions continue, and employers still have to match the employee contribution.

For payroll and HR teams, this removes short term uncertainty. Businesses can keep withholding and remitting the levy without waiting for a policy pause.

For homebuyers and property developers, the ruling signals continuity. The affordable housing programme can keep operating under the current legal framework, which matters for project planning and construction pipeline decisions.

For Kenya’s wider tech and business ecosystem, stable policy affects spending and compliance. Payroll software, finance teams, and workforce planning all depend on predictable statutory deductions.

The next question is execution. How fast the levy translates into completed homes, and how accessible those homes are across income groups, will shape public confidence in the programme.