Govt approves 85% increase in rental ceiling for Federal employees

November 05, 2025 (MLN):  The Ministry of Housing & Works has formally notified an 85% increase in the rental ceiling for federal government employees, effective November 1, 2025, following approval by the Federal Cabinet.

The revised rates have been finalized in consultation with the Finance Division to reflect prevailing market conditions, said a press release issued.

The last revision was approved on September 28, 2021, and the latest adjustment applies across all pay scales (BS-1 to BS-22) for federal employees.

The Ministry of Housing & Works, mandated to provide and manage residential accommodation for federal officers and staff, initiated this revision due to a significant surge in private rental costs in major cities, including Islamabad, Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.

The ministry noted that rising rents and urban population growth had made it increasingly difficult for employees to find suitable housing within the previous ceilings.

Federal Minister for Housing & Works Mian Riaz Hussain Pirzada congratulated all federal employees on the approval of this “landmark relief measure.” In his statement, he reaffirmed his ministry’s commitment to employee welfare and said the revision, long under consideration, aims to ease the financial burden of escalating rents.

He  said the measure would also help reduce pressure on the Estate Office, particularly in Islamabad, where there are around 17,400 government residences against approximately 43,000 registered applicants for official accommodation.

Furthermore, the government’s resolve to enhance facilitation for federal employees and address their housing challenges amid the continuing rise in market rents was reiterated.

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