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Public finance

Pakistan Unveils New Low-Cost Housing Scheme with Rs5 Billion Allocation

Strategic Insights

— 1 min read

The Pakistani government has rolled out a new low-cost housing scheme with a Rs5 billion budget allocation in the FY26 budget. The scheme, which will be launched in collaboration with the State Bank of Pakistan, offers a mark-up subsidy on loans to make home financing more accessible. This move aims to help middle and low-income families afford homes, addressing the country's rising housing shortage. Finance Minister Muhammad Aurangzeb announced the initiative, replacing the suspended 'Mera Pakistan Mera Ghar' scheme, to boost employment and stimulate growth in the housing sector.

Key Takeaways:

  • The government has allocated Rs5 billion for a new low-cost housing scheme in the FY26 budget.
  • The scheme will offer tax credits on profits paid for loans on houses up to 250 square yards or flats up to 2,000 square feet.
  • The plan targets middle and low-income families struggling with high loan costs.
  • The Naya Pakistan Housing Authority (NPHA) will receive Rs1 billion as a subsidy to support affordable housing projects.
  • The scheme is expected to boost employment and stimulate growth in the housing sector.
  • The 'Mera Pakistan Mera Ghar' scheme, which was launched in [2022], has been replaced by this new initiative.
  • The government has cut withholding tax on property sales to attract more investment and improve market activity.
  • Real estate experts have praised the government for recognizing the sector's role in national growth and job creation.

Statistics:

  • Rs5 billion allocated for the new low-cost housing scheme
  • Rs1 billion allocated as a subsidy for the Naya Pakistan Housing Authority (NPHA)
  • 250 square yards maximum plot size for houses eligible for tax credits
  • 2,000 square feet maximum area for flats eligible for tax credits
  • The scheme aims to provide relief to middle and low-income families struggling with high loan costs

Sources:

  • "Budget sets aside Rs5 billion for new low-cost housing scheme" - [Reference: The Express Tribune]
  • "Pakistan to launch new low-cost housing scheme with Rs5 billion allocation" - [Reference: Dawn]

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