Kenya Union of Post Primary Education Teachers (Kuppet) opposes the proposed three percent housing fund levy.
The union says teachers are already overtaxed and warns of unspecified action if the government goes ahead with the plan.
"We must stop this very early," said deputy secretary- general during a press conference at the union headquarters in Nairobi.
"If the government is broke, let it not borrow from teachers," he said.
The union National Governing Council is set to meet this weekend.