The Federal Government of Pakistan has officially increased the rental ceilings for hiring residential accommodation for employees working in Islamabad and other major cities including Rawalpindi, Lahore, Karachi, Quetta, and Peshawar.
According to a new Office Memorandum issued by the Ministry of Housing and Works on November 4, 2025, the revised rates will be applicable from 1st November 2025. This increase aims to help government employees meet the rising cost of housing and rent in urban areas.
Federal Govt Employees Rental Ceilings Increases 2025 Brief Information
| Category | Details |
| Issued By | Ministry of Housing and Works, Government of Pakistan |
| Date of Notification | 4th November 2025 |
| Effective Date | 1st November 2025 |
| Cities Covered | Islamabad, Rawalpindi, Lahore, Karachi, Quetta, Peshawar |
| Type of Change | Revision of rental ceilings for government residential accommodations |
| Purpose | To adjust house rent limits according to current market rates |
| Reference | Finance Division’s O.M No. 4(9)R-14/2007, dated 25-09-2025 |
Government Increases Rental Ceilings for Federal Employees
The Ministry of Housing and Works has revised the rental ceilings for all government employees from Basic Scale 1 to 22, applicable to Islamabad and other specified stations. The decision comes in response to the increasing cost of living and rising rents in Pakistan’s major cities.
The enhanced rental ceilings are effective from 1st November 2025, and apply to all new hiring cases, as well as existing lease renewals under the Accommodation Allocation Rules, 2002.
Here is the complete revised schedule as per the official notification:
Revised Rental Ceiling Schedule (Effective from 1st November 2025)
| Entitlement (BPS) | Existing Rental Ceiling (Islamabad) | Existing Rental Ceiling (Other Stations) | Revised Rental Ceiling (Islamabad) | Revised Rental Ceiling (Other Stations) |
| 1–2 | Rs. 7,029 | Rs. 6,591 | Rs. 13,004 | Rs. 12,193 |
| 3–6 | Rs. 10,980 | Rs. 9,654 | Rs. 20,313 | Rs. 17,860 |
| 7–10 | Rs. 16,403 | Rs. 14,682 | Rs. 30,346 | Rs. 27,162 |
| 11–13 | Rs. 24,744 | Rs. 21,462 | Rs. 45,776 | Rs. 39,705 |
| 14–16 | Rs. 31,085 | Rs. 27,134 | Rs. 57,507 | Rs. 50,198 |
| 17–18 | Rs. 41,147 | Rs. 35,898 | Rs. 76,122 | Rs. 66,411 |
| 19 | Rs. 54,704 | Rs. 46,816 | Rs. 101,202 | Rs. 86,610 |
| 20 | Rs. 68,700 | Rs. 59,079 | Rs. 127,095 | Rs. 109,296 |
| 21 | Rs. 82,261 | Rs. 71,107 | Rs. 152,183 | Rs. 131,548 |
| 22 | Rs. 98,444 | Rs. 89,230 | Rs. 182,121 | Rs. 165,076 |
Applicability of Revised Rental Ceilings
The new rental ceilings will apply to the following cases:
- All new hiring of government residential accommodations.
- Renewed leases where the existing agreement has expired under the Accommodation Allocation Rules, 2002.
- Self-hired houses where the rent can be increased up to the revised limit or the current market rate, whichever is lower.
- Cases of houses hired under previous rules where rent payments are adjusted as per updated limits.
The new rates will not affect houses with ongoing lease agreements until the current contract expires, except where authorized renovations or extensions have been approved by the government.
Budgetary and Financial Implications
All ministries, divisions, and attached departments have been directed to manage the additional rental expenditure within their existing budgets. The Finance Division clarified that no extra funds will be provided for this purpose during the financial year 2025–26.
The Cabinet Division and Finance Division both endorsed this revision to ensure fair housing support for government employees amid inflation and increased property prices.
Conclusion
The revision of rental ceilings from November 2025 brings long-awaited relief for federal employees struggling with rising rents in Pakistan’s major cities. This move by the Ministry of Housing and Works reflects the government’s effort to align housing allowances with the current real estate market.
It is expected that this change will improve the living standards of government officials and encourage transparency in the housing allotment system.