Islamabad: The Federal Government on Thursday approved an 85 percent increase in the house rent for Federal employees, providing long-awaited relief amid soaring rental costs across major cities.
According to official sources, the federal cabinet approved the proposal through summary circulation on the recommendation of the Ministry of Housing and Works. The decision will apply to employees from Grade 1 to 22 stationed in Islamabad, Rawalpindi, Lahore, Karachi, Peshawar and Quetta.
Officials said the revision will cost the national exchequer about 12 billion rupees.
Relief Amid Rising Rents
The Ministry of Housing and Works had proposed the increase, citing escalating rent rates and inflationary pressures that have made it difficult for employees to secure suitable accommodation.
Moreover, the ministry noted that urban housing rents have surged significantly in recent years, while the existing allowance no longer reflects current market realities. The last revision in the rent ceiling was made on September 28, 2021.
Employees Facing Housing Shortages
Officials said that the acute shortage of official residences in major urban centers forces many government employees to pay out of pocket for private housing.
The Finance Division endorsed the ministry’s proposal, stating that an 85 percent increase was “unavoidable” to align with prevailing market conditions.
Implementation and Impact
Following the prime minister’s directive, the cabinet approved the revision under Rule 17(1)(b). Consequently, the new 85 percent increase in house rent will soon take effect, bringing substantial financial relief to federal employees.
Officials said that many government employees pay out of pocket for private housing because of the acute shortage of official residences in major urban centers.
