The federal government has allocated Rs5 billion in the FY26 budget for a new low-cost housing scheme. This scheme will provide a mark-up subsidy on loans to make home financing easier. The government will work with the State Bank of Pakistan to launch the program soon, aiming to help more people afford homes.
Under this plan, the government will offer tax credits on profits paid for loans on houses up to 250 square yards or flats up to 2,000 square feet. This will reduce the cost of borrowing and encourage more citizens to build or buy affordable homes. The scheme targets middle and low-income families struggling with high loan costs.
Furthermore, the budget sets aside Rs1 billion as a subsidy for the Naya Pakistan Housing Authority (NPHA). This funding will support affordable housing projects and help increase construction activity. The government expects these efforts to boost employment and stimulate growth in the housing sector.
This new initiative replaces the “Mera Pakistan Mera Ghar” scheme, which was suspended in June 2022 to cut subsidy spending. Finance Minister Muhammad Aurangzeb announced the fresh housing plan to tackle Pakistan’s rising housing shortage and revive the stalled housing market.
Real estate experts praised the government for recognizing the sector’s role in national growth and job creation. They also welcomed the cut in withholding tax on property sales, which lowers the financial burden on buyers and developers. This tax reduction is expected to attract more investment and improve market activity.