Housing levy (affordable housing levy)

Who pays. Employees pay a share of their gross monthly salary, and their employer pays a matching amount. People who earn income outside employment pay the same rate on their gross income (see the figures box). The Kenya Revenue Authority collects it.

Income tax. Since the Tax Laws (Amendment) Act 2024 took effect in late December 2024, the levy an employee pays is deducted from their employment income before PAYE is worked out. This replaced the earlier affordable housing relief.

When it is due. Employers deduct the levy and remit it to KRA shortly after the end of each month, by the deadline in the figures box. Late payment attracts a monthly penalty on the unpaid amount.

History.

• The levy was first introduced by section 84 of the Finance Act 2023.
• The High Court found that version discriminatory because it charged only salaried workers.
• Parliament re-enacted the levy in the Affordable Housing Act 2024, assented on 19 March 2024. The levy sections came into force on assent.
• In October 2024 the High Court dismissed challenges to the 2024 Act.
• On 25 September 2026 the Court of Appeal dismissed the appeal. It upheld KRA as collector and the Act's transitional section that preserves levies collected under the Finance Act 2023. It also criticised how the Bill was handled, saying the Commission on Revenue Allocation should have been able to consider it first, but this did not overturn the Act.
• As of 13 October 2026 we found no report of an appeal to the Supreme Court.

Where the money goes. Levy funds go into the Affordable Housing Fund, which pays for housing projects and purchases under the programme. Contributions are not a personal savings account in the usual sense, although contributors can use the programme to buy homes.