- The ruling, delivered on September 25, 2026, means the government can continue collecting the levy.
- The Court of Appeal has now dismissed the appeals challenging the law, meaning the levy remains in place.
- The court did, however, raise an issue around the role of the Commission on Revenue Allocation (CRA) in the law-making process.
The Affordable Housing Levy is staying in place after the Court of Appeal dismissed challenges against the law.
The ruling, delivered on September 25, 2026, means the government can continue collecting the levy and using it to fund its affordable housing programme.
But what does this actually mean for employees, employers and people looking to buy a home?
READ ALSO: Kenya’s Affordable Housing: Progress and Challenges in 2025
What is the Affordable Housing Levy?
The Affordable Housing Levy was introduced to help fund the construction of affordable homes in Kenya.
Under the current law, employees contribute 1.5% of their gross salary, while employers contribute another 1.5%.
The money collected goes towards the government's affordable housing programme.
Why was the levy challenged?
The levy has faced several legal challenges since its introduction.
The cases questioned issues including how the Affordable Housing Act was passed, public participation and the collection of the levy by the Kenya Revenue Authority (KRA).
The Court of Appeal has now dismissed the appeals challenging the law, meaning the levy remains in place.
The court did, however, raise an issue around the role of the Commission on Revenue Allocation (CRA) in the law-making process. The judges found that the CRA should have had an opportunity to consider the Bill because of its potential financial impact on county governments.
Despite this finding, the court dismissed the appeals.
What does this mean for employees?
For employees, there is no immediate change to the Affordable Housing Levy.
The existing contribution structure remains in place, meaning 1.5% of gross salary continues to be deducted from employees, with employers contributing an equal amount.
So, if you were wondering whether the court case would stop or change the deduction from your payslip, this ruling does not do that.
What does it mean for people looking to buy a home?
The ruling also means the government's affordable housing programme can continue under the current legal framework.
For people hoping to access an affordable home through the programme, this provides some clarity on its future.
The bigger question now is how quickly the programme can deliver homes and how accessible those homes will be to different income groups.
For anyone planning to buy a home, it is also worth remembering that affordable housing is only one part of Kenya's wider property market. Buyers still need to consider location, financing, monthly repayments and the total cost of owning a home.
READ ALSO: How Fresh Billions for Affordable Housing Could Reshape Kenya’s Property Market
What does it mean for Kenya's property market?
The continued implementation of the Affordable Housing Programme could affect more than just the people buying the homes.
Developers, contractors, suppliers and other businesses involved in construction are also part of the wider housing ecosystem.
More housing supply could also influence the areas where people live, work and invest as new developments come up.
For now, however, the key takeaway is simple: the Affordable Housing Levy remains in place, and the government's affordable housing programme can continue under the current law.
The next thing to watch is not whether the levy will continue, but how the funds collected will translate into homes and opportunities for Kenyans.
