- A major legal hurdle facing the government’s housing programme has been cleared
- Questions over how the housing programme is funded have been settled by the court
- The ruling also addresses concerns surrounding land set aside for housing projects
The Court of Appeal has dismissed a raft of legal challenges against the Affordable Housing Act, 2024, handing the government a decisive win in its push to fund and deliver low-cost housing nationwide, even as the judges flagged a procedural gap in how the law was passed.
The bench delivered its judgement in Nairobi on Friday, September 25, 2026, throwing out consolidated petitions that had sought to have the law, and the 1.5 per cent housing levy it created, struck down as unconstitutional. The judges found no merit in the appeal and upheld most of the High Court’s earlier findings.
Among those behind the legal fight were Busia Senator Okiya Omtatah and Nakuru-based surgeon Dr Magare Gikenyi, who had argued that the law breached constitutional rights, undermined devolution, threatened property rights and was passed without adequate public participation.
President William Ruto signed the Affordable Housing Act into law in March 2024 at a State House ceremony, cementing the levy as a central pillar of his housing agenda even as it drew sustained pushback from critics.
While largely siding with the government, the court found fault with one part of the legislative process. The judges held that the Commission on Revenue Allocation (CRA) should have been given a chance to review the Bill and make recommendations before Parliament debated and passed it, since the Act allows part of the housing fund to be channelled to county governments.
Citing Article 205 of the Constitution, the bench said the CRA’s input is required before, not after, a Bill touching on county financial matters is discussed in the National Assembly and Senate. This overturned the High Court’s earlier view that the CRA’s role would only come into play once the Act was being implemented.
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The judges, however, noted that the CRA had never been made a party to the case, which made it difficult to determine conclusively whether it had actually been denied the chance to weigh in.
The court also upheld the retrospective effect of Section 60 of the Act, finding that Parliament had intended the provision to preserve transactions carried out under the earlier Section 84 of the Finance Act, 2023, before that section was struck down by the High Court in a separate case. The judges said the petitioners had failed to show that applying the section retrospectively would interfere with existing contracts, take away established rights or breach any constitutional prohibition.
On who should collect the levy, the court backed the appointment of the Kenya Revenue Authority’s Commissioner General, pointing to provisions in the Kenya Revenue Authority Act that designate the Authority as the government’s agent for collecting and receiving revenue. The judges also referenced the Commissioner General’s broader mandate over the Authority’s funds, property and affairs in concluding that the appointment could not be faulted.
The court further weighed in on the use of public land for housing projects, affirming that the National Land Commission must approve any such allocation, and rejected arguments that the Act’s provisions were too vague to be enforced.
In its final orders, the Court of Appeal dismissed the appeal in full, leaving the Affordable Housing Act and the 1.5 per cent levy intact. The ruling gives the government a firmer legal footing to keep collecting the levy and rolling out housing units, even as the CRA finding leaves open questions about how future amendments to the law’s funding structure should be handled.
By Benedict Aoya
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