Government Introduces Tax Credit and Mortgage Policy to Boost Affordable Housing

The federal government has unveiled a new policy initiative in the 2025-26 budget aimed at promoting the construction of affordable housing and broadening access to mortgage financing across Pakistan.

As outlined in the budget speech, a tax credit scheme will be introduced for individuals building or purchasing houses up to 10 marlas or flats with a maximum area of 2,000 square feet. This move is designed to provide financial relief to middle- and lower-income families while stimulating growth in the housing sector.

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In addition, the government has committed to advancing mortgage financing through a comprehensive policy framework. The strategy aims to make affordable home loans more accessible by involving both public and private financial institutions in a streamlined, coordinated system to ease the borrowing process.

The initiative reflects the government’s broader efforts to enhance financial inclusion and support socioeconomic development through increased homeownership.