Panel of judges rejects application to suspend housing tax

In a significant legal development, a three-judge panel has declined to stay the controversial housing levy pending the outcome of a case filed earlier this year.

The plaintiff, Magare Gikenyi, filed the case in March, challenging the newly enacted Affordable Housing Act, 2024, alleging discrimination against businesses.

Gikenyi argued that Section 48(2) of the Act wrongly excluded corporations from ownership of property, even though they made significant contributions to the national economy through their taxes.

He claims that these provisions violate constitutional principles and existing laws protecting corporate rights.

“We are convinced that it is in the public interest to give priority to the hearing of this petition,” ruled the court, consisting of judges John Chigiti, Olga Sewe and Josephine Mong’are.

The judges rejected the plaintiff’s application for a stay of the housing tax, saying Gikenyi’s application was without merit. The housing tax, which is a 1.5 percent deduction due to a lack of public consultation on housing preferences such as location, architectural style and mortgage terms, is imposed by law.

The petition lists the Cabinet Secretaries for Lands and Treasury, the Attorney General, the National Assembly and the Senate as respondents, underscoring the far-reaching implications of the case given the legislative origins of the controversial law.

The law creates a framework for the collection of housing taxes and the implementation of projects and programs for affordable housing.

President William Ruto signed the Affordable Housing Bill 2023 on 19 March. Sections 4 and 5 of the Affordable Housing Act 2024 relate to the collection of levies and deductions by employers and came into force on the day the bill was signed.