Court declines to temporarily halt housing levy

President William Ruto assents to the Affordable Housing Bill at State House, Nairobi on Tuesday.

President William Ruto assents to the Affordable Housing Bill at State House, Nairobi in March 2024.

Photo credit: PCS

The High Court has declined to temporarily suspend parts of the Affordable Housing Act, including the collection of the levy, saying public interest favours allowing the law to operate until the petitions are decided.

A three-judge bench said that laws enacted by Parliament enjoy a presumption of constitutionality and the court cannot stop them unless it can be shown that there is a real risk of a right being violated.

Six petitions were filed challenging various provisions of the Affordable Housing Act of 2023 and were consolidated before Chief Justice Martha Koome appointed Justices Olga Sewe (presiding), John Chigiti and Josephine Mong'are to hear the cases.

“It is our finding, therefore, that the petitioners have failed to show that the impugned provisions pose a danger to life or limb or that they threaten the Bill of Rights to warrant the orders sought. We are not persuaded that the petition will be rendered nugatory if the orders sought are not granted,” the judges said.

The judges said they had no doubt that the affordable housing levy had generated a lot of public interest with differing arguments as to its constitutionality.

Lack of clarity

The petitioners, among them Dr Magare Gikenyi, had argued that the absence of a board to manage the fund and the lack of clarity about the collector of the levy left the money vulnerable to theft and misappropriation in contravention of Article 10(2) of the Constitution, which provides for principles of national values and good governance, integrity, transparency and accountability.

They also pointed out that the duties of the Commissioner General of the Kenya Revenue Authority are limited to the affairs of the authority and not to the collection of the levy.

The court was further informed that the housing levy was set at 1.5 per cent without a study to show how the fund would operate, yet no money should be collected from the public without an expenditure line and a fully functioning fund established as required by law.

The government defended the law, arguing that every Act of Parliament enjoys the presumption of constitutionality.

Parliament also argued that the Act provides a legal framework for the levy and that the imposition of levies is not unusual in Kenya. It cited the Road Maintenance Levy and the Petroleum Levy as examples of such initiatives.