Court of Appeal Upholds Affordable Housing Act, Dismisses Challenge

In a judgment delivered in Nairobi on September 25, 2026, the court found no merit in the appeal and upheld the High Court’s determination on most of the issues raised by the petitioners.

"We have considered the submissions made, and we agree with the respondents that since section 5 of the Kenya Revenue Authority Act as amended provides that the Kenya Revenue Authority is an agent of the government for purposes of the collection and receipt of all revenue and section 11 of the said Act," reads the judgement.

However, the three-judge bench faulted the process used in enacting the law, finding that the Commission on Revenue Allocation (CRA) should have been given an opportunity to consider the Bill and make recommendations before it was debated and passed by Parliament.

The court noted that the Affordable Housing Act provides for the collection of funds through the Affordable Housing Fund and allows part of the fund to be allocated to county governments.

“Since the Constitution, in Article 205, requires that when a Bill includes any financial matter concerning county governments is published, the Commission on Revenue Allocation shall consider those provisions and may make recommendations,” the judges said.

The court found that the CRA ought to have been given an opportunity to consider the Bill and make recommendations to the National Assembly and the Senate before the two Houses voted on it.

The judges rejected the High Court’s interpretation that the CRA’s role would arise only during implementation of the Act.

According to the appellate judges, Article 205 requires the CRA’s input before the Bill is discussed in Parliament, rather than after the legislation has been enacted.

The court, however, observed that the CRA had not been made a party to the proceedings, making it difficult to establish whether it had actually been denied the opportunity to consider the Bill.

“The CRA was never made a party to the proceedings and hence its position as to whether or not this opportunity was afforded was not clearly brought out,” the court said.

The Court of Appeal also upheld the retrospective application of the Affordable Housing Act.

The judges found that Section 60 of the Act was intended by Parliament to apply retrospectively in order to preserve transactions that had taken place under Section 84 of the Finance Act 2023 before the High Court’s determination in Petition 181 of 2023.

The court said the petitioners had not demonstrated that the retrospective application would impair contractual obligations, take away existing rights or otherwise violate a constitutional prohibition.

The judges therefore agreed with the High Court that Parliament intended Section 60 to have retrospective effect.

The court further upheld the appointment of the Commissioner General of the Kenya Revenue Authority as the collector of the housing levy.

It relied on the Kenya Revenue Authority Act, which provides for the Authority to act as the government’s agent in collecting and receiving revenue.

The court also cited the functions of the Commissioner General, including the management of the Authority’s funds, property and affairs.

The judges consequently found that the appointment of the Commissioner General to collect the levy could not be faulted.

In its final orders, the Court of Appeal dismissed the appeal, finding no merit in it.