A highlight of Kenya’s Affordable Housing Act, 2024

  • Legal Development 12 April 2024 12 April 2024
  • Africa

  • Real Estate

Recently, His Excellency Dr. William Samoei Ruto, the President of Kenya, assented to the Affordable Housing Bill 2023 on 19th March 2024. The Affordable Housing Act, Act No. 2 of 2024, (the Act) establishes a framework aimed at facilitating the development and accessibility of affordable and institutional housing. Kenya’s latest legislation aligns with Article 43(1)(b) of the Constitution of Kenya which guarantees every individual the right to accessible and adequate housing.

Highlights of the Act

A. Imposition of the Affordable Housing Levy

The Act introduces an Affordable Housing Levy (the Levy) set at the rate of one point five percent (1.5%) of the gross salary of each employee or an individual’s received or accrued gross income not subject to the Levy. Employers are required to match each employee’s contribution by contributing an equal amount to the Levy amount.

The Act designates the Commissioner-General of the Kenya Revenue Authority as the “Collector” of the Levy. Employers are obligated to deduct the Levy from each employee’s monthly gross salary and remit the same to the Collector not later than the ninth (9th) working day after the end of the month in which the gross salary was due. An employer is required to remit the Levy as follows:

  • one point five percent (1.5%) of the employee’s monthly gross salary; and
  • the employer’s contribution equal to the one point five percent (1.5%) of the employee’s monthly gross salary.

Failure to remit the Levy when it becomes due and payable incurs a penalty in which the liable party shall pay a penalty equal to three percent (3%) of the unpaid amount for each month that the amount remains unpaid. Additionally, the Act dictates that the penalty shall be summarily recovered as a civil debt for the liable party.   

B. Establishment of the Affordable Housing Fund and Board

Proceeds from the Levy are directed into the Affordable Housing Fund which is established by the Act to finance the design, development and maintenance of affordable and institutional housing along with associated social and physical infrastructure.

The Act also establishes the Affordable Housing Board which is tasked with allocating funds from the Affordable Housing Fund towards the development and off-take of affordable housing programmes and projects, institutional housing and related social and physical infrastructure projects. 

C. Implementation of the Affordable Housing Scheme

The Act authorizes public and private sector engagements in effecting the development of institutional housing and implementation of the affordable housing scheme, respectively. 

The Affordable Housing Board may contract private institutions for the construction of affordable housing units, and associated infrastructure, and supply of goods and materials in connection with the construction of affordable housing, subject to a transparent tendering process. 

Prior to contracting with private institutions, the Affordable Housing Board is obligated to publish in at least two (2) newspapers of nationwide circulation and on electronic media, a notice of intention to enter into the contract and invite tenders from the public. 

The Cabinet Secretary for the Ministry of Lands, Public Works, Housing and Urban Development (the Cabinet Secretary) has the power, in consultation with the Affordable Housing Board, to prescribe guidelines for the tendering process and publication of a notice.


The Act’s provisions concerning imposition of the Levy and its remittance became effective on 19th March 2024. The remittance due date of the Levy is aligned with the due date of remitting the income tax, Pay As You Earn (PAYE). The Levy is currently imposed on both salaried and non-salaried persons whose income is accrued in Kenya and employers are expected to account for the levy in the March 2024 payroll and going forward.

All other sections of the Act came into operation on 22nd March 2024 via Legal Notice No. 54 published in the Kenya Gazette. We can look forward to the publishing of subsidiary legislation to the Act which shall provide finer details on implementation of the Act.


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