The Housing Levy started in mid-2023. By April 2025 the Kenya Revenue Authority had collected KES 114.5 billion of it, from workers and their employers, the Auditor-General found.
When the Auditor-General's team checked the sites in April 2025, none of the 142 affordable housing projects on the Affordable Housing Board's list was finished. Seventy-eight had not started.
The Afronomics verdict: the Housing Levy collects like a tax and builds like a promise: KES 114.5 billion came in on time, while the houses it was sold on are mostly still building sites and plans.
What happened
FactsThe levy was first imposed by section 84 of the Finance Act, 2023. On 28 November 2023 the High Court declared section 84 unconstitutional, "null and void", for violating Articles 10(2)(b) and (c) and 201 of the Constitution, and barred the government from collecting the levy under it ([2023] KEHC 25872 (KLR)). The court found the levy lacked a comprehensive legal framework.
FactsParliament then passed the Affordable Housing Act, 2024. It was assented to on 19 March 2024 and published in the Kenya Gazette on 21 March 2024. Section 4 sets the levy at "one point five percent" of an employee's gross salary, or of other gross income not already levied. Section 5 makes the employer deduct the employee's 1.5% and pay an equal amount on top. Both go to KRA, the collector, by the ninth working day after the end of the month, for the Affordable Housing Fund.
FactsThe Auditor-General's special audit, requested by the Affordable Housing Board and signed on 27 February 2026, traced the money to April 2025:
| KES billion | |
|---|---|
| Collected by KRA, August 2023 to April 2024 | 42.73 |
| Collected by KRA, May 2024 to April 2025 | 71.80 |
| Total collected | 114.52 |
| Sent to the State Department for Housing (before the Act) | 34.72 |
| Sent to the Affordable Housing Fund (after the Act) | 76.60 |
| Cash in transit at April 2025 | 2.38 |
| Kept by KRA as commission | 0.82 |
Source: Auditor-General, special audit of the Affordable Housing Programme, Tables 4 and 5. The audit groups collections by legal period, not by financial year.
FactsOf the KES 34.72 billion the State Department received, the audit found KES 14.51 billion was spent on projects. KES 20 billion was put into Treasury bills on 17 May 2024. KES 0.19 billion went back to the National Treasury at the year's end. The Treasury bills were later handed to the Affordable Housing Board.
FactsThe State Department's budget for the programme was KES 63.22 billion in 2023/24 and KES 64.69 billion in 2024/25, to be paid for from the levy, the audit says. The audit also found the programme was launched without a consolidated feasibility study, and with no documented cost-benefit analysis or affordability threshold.
Houses: promised and finished
FactsThe government's plan (the Fourth Medium-Term Plan, 2023 to 2027) aims for 250,000 housing units a year, according to the audit. In April 2025 the auditors visited the projects on the Board's list. Of 142 affordable housing projects, none was complete, 60 were under way, 78 had not started and 4 were not visited. The same list held 159 institutional housing projects, which the auditors did not visit because, they note, most had been completed and occupied. The audit lists slow procurement and approvals, weak contract records, site problems and thin supervision as causes.
FactsThe Board's own annual report for 2024/25 tells a busier story. It says the Board "directly enabled a pipeline of 178,627 housing units at different stages of construction with 3,171 units complete", and that KRA had collected KES 125 billion since the levy began. The Auditor-General's report on the Board's accounts is dated 19 December 2025.
AnalysisThe two documents count different things. The audit counts projects on one list at one date; the Board counts units across all its work, including institutional housing. But on the Board's own figure, 3,171 completed units is about 1% of one year's 250,000 target.
What it costs a worker
AnalysisThe levy is 1.5% of gross pay, with no cap. The employer pays the same again. KRA treats the levy as a deduction before PAYE, so part of it comes back as lower tax. On our net salary calculator's rates:
| Gross pay a month | Levy deducted | Employer pays | Your take-home falls by | A year, you and employer |
|---|---|---|---|---|
| KES 50,000 | KES 750 | KES 750 | KES 525 | KES 18,000 |
| KES 100,000 | KES 1,500 | KES 1,500 | KES 1,050 | KES 36,000 |
Arithmetic: 1.5% of gross. Both salaries sit in the 30% PAYE band, so the levy lowers PAYE by 30% of itself: KES 225 and KES 450. Rates from the Afronomics payroll file (KRA, SHA); the result is the same for any NSSF amount on the payslip.
AnalysisPut your own payslip into the net salary calculator to see the levy and every other deduction.
In court
FactsThe 2023 levy fell in the High Court, as above, and the Affordable Housing Act that replaced it was challenged in turn: on 25 September 2026 the Court of Appeal dismissed the appeal and upheld the Act, Citizen Digital and The Kenya Times report (Gikenyi B & 5 others v Cabinet Secretary for Lands and others, Civil Appeal E832 of 2024, [2026] KECA 1821 (KLR)). The levy is still collected.
Our verdict
OpinionThe Housing Levy collects like a tax and builds like a promise: KES 114.5 billion came in on time, while the houses it was sold on are mostly still building sites and plans.
The collection side works. KRA takes the money at source every month, and workers cannot opt out. The audit accounted for every shilling of the first KES 114.5 billion: remitted, in transit or kept as KRA's commission.
The building side does not yet match it. Of the levy collected before the new Act, KES 20 billion sat in Treasury bills while KES 14.5 billion went into projects. A levy sold as houses for workers spent much of its first year as a government deposit. The audit traced that money, and the bills were handed over to the Board. But a worker on KES 50,000 paid KES 750 a month for a house programme that, on the audit's April 2025 count, had not finished one project on its affordable housing list.
The Act has now survived the Court of Appeal. That makes delivery the test that matters. The fair measure is completed homes, handed over, against money collected, year by year, in the Board's audited reports.
What would change our mind
The Board's 2025/26 audited report showing tens of thousands of completed units handed over, with levy cash spent on construction rather than held in bills. And an independent count, by the Auditor-General or KNBS, that matches the Board's own.
Information, not advice.