Federal Govt Increases House Rent Ceiling 85% For Employees Notification 2025
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The Government of Pakistan has approved a major increase in the rental ceiling for federal government employees, raising it by 85% across the board. This decision was finalized after the Prime Minister’s approval on 28th October 2025 and later endorsed by the Federal Cabinet on 31st October 2025.
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The new rental ceiling applies to all employees from BS-1 to BS-22 working in Islamabad, Rawalpindi, Lahore, Karachi, Peshawar, and Quetta. This long-awaited move aims to help government officers and staff manage the rising cost of house rent in major cities where government accommodation is limited.
Enhancement of Rental Ceiling for Federal Government Employees 2025 Brief Information
| Topic | Details |
| Notification Title | Enhancement of Rental Ceiling for Federal Government Employees |
| Approved By | Prime Minister of Pakistan & Federal Cabinet |
| Issuing Department | Ministry of Housing and Works |
| Approval Date | 28 October 2025 (PM Office), 31 October 2025 (Cabinet) |
| Increase Percentage | 85% across the board |
| Applicable Grades | BS-1 to BS-22 |
| Applicable Cities | Islamabad, Rawalpindi, Lahore, Karachi, Peshawar, Quetta |
| Reason for Increase | High house rents due to inflation and shortage of government accommodation |
| Effective From | Immediate effect after Cabinet approval |
| Official Reference | PMO No.3254/APM/2025 & Cabinet Case No.743/Rule-19/2025/1015 |
Why the Government Increased the House Rent Ceiling
Over the years, rents in Pakistan’s major cities have increased sharply due to inflation and urban population growth. Many government employees found it difficult to rent suitable private houses within the previously fixed rental limits.
The Ministry of Housing and Works conducted detailed surveys with the Estate Office, Pakistan Bureau of Statistics (PBS), and Pak PWD, all confirming that rental costs had gone far beyond the old ceiling approved in 2021.
To address these difficulties, the ministry proposed an 85% increase in rental ceilings, which was endorsed by the Finance Division and finally approved by the Prime Minister. This increase will make it easier for employees to rent proper accommodation without paying extra from their own pocket.
New Rental Ceiling Policy – Cities and Grades Covered
The revised rental ceiling will cover all Federal Government employees (BS-1 to BS-22) who are posted in six main stations — Islamabad, Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.
This policy applies to employees who are eligible for hired residential accommodation under the government’s housing policy. The Ministry of Housing and Works has also been directed by the Prime Minister’s Office to simplify the documentation process so that employees can easily claim their rental ceilings.
A revised procedure will soon be notified by the Ministry to ensure fast and transparent processing with minimal paperwork, within 15 days of the Cabinet’s decision.
Conclusion
The 85% increase in the rental ceiling marks a major relief for thousands of Federal Government employees across Pakistan. It reflects the government’s acknowledgment of the growing cost of living and accommodation shortages in urban centers.
With this approval, employees from BS-1 to BS-22 will now receive higher rent ceilings to match the market situation. The step also shows the government’s intent to improve the welfare of its employees by keeping housing allowances closer to actual market conditions.
FAQs
Q1. What is the new increase in the rental ceiling for government employees?
The rental ceiling has been increased by 85% across all grades (BS-1 to BS-22).
Q2. Which cities are included in the new policy?
The increase applies to Islamabad, Rawalpindi, Lahore, Karachi, Peshawar, and Quetta.
Q3. Who approved the increase in rent ceiling?
It was approved by the Prime Minister and later confirmed by the Federal Cabinet on 31 October 2025.
Q4. When will the new rates take effect?
They take effect immediately after the Cabinet’s approval.
Q5. Will the process of claiming rent be made easier?
Yes, the Ministry of Housing and Works will introduce a simplified procedure within 15 days for easy claim and documentation.
