In a significant move aimed at alleviating the financial strain on its workforce, the federal government has formally approved a substantial 85% increase in the rental ceiling for all its employees, responding to the sharp escalation of private housing costs in major urban centers.
The Ministry of Housing and Works issued the official notification, which makes the new rental limits effective from November 1, 2025. This revision, formulated in consultation with the Finance Division, is the first such adjustment since September 28, 2021, and applies uniformly to personnel from BS-1 to BS-22.
Officials familiar with the matter stated the adjustment was long overdue, as surging inflation and urban population growth have caused private rental rates to soar, making it exceedingly difficult for government staff to find affordable accommodation within the previous limits.
In a statement, Federal Minister for Housing and Works Mian Riaz Hussain Pirzada described the notification as a ‘landmark relief measure.’ He emphasized his commitment to the welfare of government workers, noting the ministry had pursued the revision since last year to address the financial stress caused by rising rents.
‘The government is fully aware of the challenges faced by employees in securing suitable accommodation,’ the minister said. ‘By substantially raising the rental ceiling, we are easing this burden and sharing a greater portion of housing costs.’
The decision is also anticipated to reduce the administrative load on the Estate Office. This is particularly relevant in Islamabad, where a significant housing deficit exists, with approximately 43,000 registered applicants competing for around 17,400 available government residences.
The Ministry of Housing and Works, responsible for providing official accommodation, reiterated its pledge to enhance facilitation for its employees and to tackle the growing housing demand amid challenging market conditions. The hiring of residential properties is managed across six key stations: Islamabad, Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.