1. Further to the KQU 3637, being an important matter, we would inform you about Government revises rental ceilings for federal employees’ housing in major cities - Ministry of Housing and Works (Attachment 74.1 - not on any official website but found from reliable resource).

2. The Federal Government is pleased to enhance Rental ceiling for Hiring of Residential accommodation in Federal Ministries/Divisions/Attached Department/Subordinate Offices at Islamabad and other specified stations i.e. Rawalpindi, Karachi, Lahore, Quetta and Peshawar as under with w.e.f. 1.11.25.

3. The enhanced rental ceilings come into force w.e.f. 1.11.25 and will apply to:-

i). All cases of fresh hiring.

ii). Cases where the allottee/occupant is obliged to pay difference of rent to the owner out of his own resources. In such a case the rent may be increased up-to the owner's demand (indicated at the time of hiring) or the allottee/occupant's revised rental ceiling whichever is less.

iii). Cases of houses hired under Rule 8(i) of the Accommodation Allocation Rules, 2002 or M/o Housing and Works' O.M No. 2(3)/2003-Policy dated 31-07-2004 of which lease has expired. The lease agreement may be executed with the owner as per current rent assessment of the house or the occupant's revised rental ceiling or the owner's demand, whichever is less.

iv). Cases of houses hired under Rule 9(i) of the Accommodation Allocation Rules, 2002 on self-hiring basis: In such a case, the existing rent of the house may be increased upto the revised rental ceiling of the allottee/occupant or the rental assessment of the house whichever is less.

4. The above rental ceilings may also be applied, mutatis-mutandis, in cases of requisitioned houses otherwise qualifying for increase in rent/compensation in accordance with the relevant rules/instructions

5. In all other cases of hired houses except in cases where additions/alterations have been made with the prior permission of the Government, the benefit of revised rental ceilings will be permissible only on the expiry of the current lease agreement.

6. The existing instructions issued on the subject from time to time will remain in force with the above modifications.

7. All the Ministries/Divisions/Attached Department/Subordinate offices will meet the increased expenditure out of their respective budgetary allocations and no additional funds will be allowed to them for this purpose during the financial year (2025-2026).

8. This issues in accordance with Finance Division's O.M No. 4(9)R-14/2007, dated 25.9.25 and Cabinet Division's vide Dy.1015(S)/2025-Cab, dated 31.10.25.

Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com.

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Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

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