Six petitions challenging the housing levy among other provisions of the Affordable Housing Act were filed but later consolidated
The High Court has ruled that the Affordable Housing Act of 2024 was properly enacted per the Constitution. This ruling allows the government to continue with the program and to keep imposing the affordable housing levy that is currently at the rate of 1.5% of gross salary.
Justice Olga Sewe, John Chigiti and Josephine Mong’are on Tuesday, October 22, 2024, ruled that the Act is constitutional and that there was adequate public participation.
Six petitions challenging the housing levy among other provisions of the Affordable Housing Act were filed but later consolidated, including one filed by 22 senators led by Busia Senator Okiya Omtatah and seven other human rights defenders. They sought to quash the Act in its entirety.
The Milimani Law Courts in Nairobi. /FILE
The petitioners in the matter had specifically taken issue with a section of the new Act that seeks to appoint the Commissioner General of the Kenya Revenue Authority (KRA) as the collector of the affordable housing levy, and sections 4 and 5 of the Act, which impose the levy.
The judges observed that their ruling solely focused on key issues that were raised by the petitioners in regard to the Affordable Housing Act. The key issues for determination included; whether there was adequate public participation on the matter, whether Articles 27,40 and 43 of the Constitution were infringed, on whether the Act clawed on devolution.
The court was also supposed to determine whether the government illegally used public land to construct the houses without involving the National Lands Commission (NLC).
This comes after Chief Justice Martha Koome on March 19 appointed a three-judge bench to hear and determine a string of cases challenging the implementation of the new Affordable Housing Act.
Earlier on July 14, the Court had declined to issue orders stopping the imposition of the affordable housing levy. This came after it considered among other issues arguments advanced by the state that it would be difficult to reverse the effects if the orders were granted because contracts have already been signed and infrastructure projects initiated.
“We have no doubt that the affordable housing levy is a matter that has generated a lot of public interest. We are also convinced that the public interest tilts in favour of not granting the order but in prioritizing these petitions for hearing and determination,” the judges said.
This ruling deals another huge blow to thousands of salaried Kenyans who had sought to bar the government from deducting from their hard-earned salaries to fund the Affordable Housing Programme.
The government will now be able to continue with the affordable housing levy deductions, that it imposed at a standard rate of 1.5 per cent on the gross salary of an employee or the gross income of a person received or accrued.
Employers will also contribute a 1.5 per cent deduction from their employees’ salaries, bringing the total contribution to the government to 3 per cent.
This was the first new deduction which rattled Kenyans because they were having their salaries deducted amidst a harsh economy in the country, and the fact that some of them were being made to pay for houses they had not budgeted for.
President William Ruto signed the Housing Bill into law at State House Nairobi on Tuesday, March 19, which cast the deductions from monthly salaries in stone.
The new legislation ropes in workers in the informal sector for the regulations to be in agreement with the High Court ruling that rendered it unconstitutional last year. Still, it did not soften the tempers of Kenyans and led to court cases against it.
President William Ruto overseeing the laying of the foundation of an affordable house in Murang’a on February 14, 2024. /PCS
