Kenya Court of Appeal Affordable Housing Levy: Legality Upheld

• The Kenya Court of Appeal upheld the legality of the Affordable Housing Act, 2024, and its associated levy.
• A five-judge bench dismissed two appeals challenging the law's constitutionality and the KRA's collection role.
• The court affirmed the KRA Commissioner-General's mandate to collect the Affordable Housing Levy, finding sufficient public participation.
• Judges noted that the Commission on Revenue Allocation (CRA) should have reviewed the Bill before parliamentary debate, as required by Article 205 of the Constitution.
• The ruling confirms the enforceability of the Affordable Housing Levy and the legal framework for the Affordable Housing Fund.

For legal practitioners advising clients in Kenya, this judgment provides crucial clarity: the Affordable Housing Levy is now legally affirmed, confirming its enforceability and the Kenya Revenue Authority's mandate to collect it.

The Kenya Court of Appeal has decisively upheld the legality of the Affordable Housing Act, 2024, and the associated Affordable Housing Levy, dismissing two separate appeals that sought to challenge their validity and constitutionality. A five-judge bench delivered this significant judgment on Friday, September 25, thereby affirming a prior High Court decision from October 22, 2024. The High Court had similarly rejected petitions questioning the fundamental constitutionality of the housing law, setting the stage for this appellate review.

Appellants in the case had raised a broad spectrum of constitutional concerns against the Affordable Housing Act, 2024, arguing that its provisions infringed upon fundamental rights and established legal principles. Their contentions included alleged violations of property rights, principles of devolution, the right to adequate housing, and the requirement for proper public participation during the legislative process. Furthermore, a specific point of contention was the appointment and designation of the Kenya Revenue Authority Commissioner-General as the official collector of the Affordable Housing Levy, which appellants argued was improper.

In its comprehensive ruling, the Court of Appeal meticulously reviewed the submissions and ultimately found no substantive merit in the arguments presented by the appellants. The bench unequivocally affirmed the entire legal framework underpinning both the Affordable Housing Levy and the establishment of the Affordable Housing Fund, reinforcing their legal foundation. The judges articulated their decision with a clear statement, noting, "Having considered the submissions made, we find no merit in this appeal, which we hereby dismiss," underscoring the finality of their determination on the Kenya housing levy constitutionality.

Crucially, the court also validated the role of the KRA Commissioner-General in the collection of the levy, specifically noting that the law expressly assigns this responsibility to the office, thereby confirming the KRA Affordable Housing Levy collection mandate. Addressing another key challenge raised by the appellants, the court concluded that there had been sufficient public participation throughout the enactment process of the Affordable Housing Act. Given the overarching public interest nature of the legal challenge, the court opted not to issue any orders regarding costs for the proceedings, ensuring accessibility to justice.

Despite the broad affirmation of the Affordable Housing Act and the Kenya housing levy constitutionality, the Court of Appeal did highlight a specific procedural oversight concerning the Commission on Revenue Allocation (CRA). The court observed that the CRA should have been afforded an opportunity to review the Bill and provide its recommendations before it proceeded to parliamentary debate and eventual passage into law. This finding indicates a point of procedural improvement for future legislative processes.

This particular finding is rooted in Article 205 of the Constitution of Kenya, which explicitly mandates that the input of the Commission on Revenue Allocation must be sought prior to a Bill being discussed in Parliament, rather than at a later stage during its implementation. While this observation points to a procedural lapse in the enactment of the Affordable Housing Act, it did not, in the court's view, invalidate the entire legislative framework or the KRA Affordable Housing Levy collection mandate, thus preserving the Affordable Housing Act 2024 legality.

The recent decision by the Kenya Court of Appeal regarding the Affordable Housing Levy solidifies its legal standing and enforceability across the nation. This ruling confirms that the KRA Affordable Housing Levy collection is legally mandated and that the framework for the Affordable Housing Fund is robust and constitutionally sound. For legal practitioners advising clients in Kenya, this judgment provides crucial clarity: the Affordable Housing Levy is now legally affirmed, confirming its enforceability and the Kenya Revenue Authority's mandate to collect it. While the court's observation on the Commission on Revenue Allocation's role highlights a procedural point for legislative consideration, it does not undermine the overall validity of the Affordable Housing Act 2024 legality, ensuring its continued operation.

Lawyers advising clients in Kenya should note that the Affordable Housing Levy is now legally affirmed by the Court of Appeal, confirming its enforceability and the KRA's collection mandate. While the law stands, the court's observation on the Commission on Revenue Allocation's role highlights a procedural point for future legislative challenges or drafting.

Source: Original reporting via Capital FM.