Islamabad: The federal government has introduced a new tax credit under Section 63A of the Finance Act 2025, aimed at promoting affordable housing by offering tax relief on interest payments for low-cost housing loans.
According to the new provision, individuals will be entitled to a tax credit against profit on debt, share in rent, or share in the appreciation of a home’s value—provided the loan is obtained from a scheduled bank, a financial institution regulated by the Securities and Exchange Commission of Pakistan (SECP), or a government-linked entity.
The credit applies specifically to housing loans used for constructing or acquiring a personal residential unit—either a house with a land area of up to 2,500 square feet or a flat of up to 2,000 square feet.
To ensure the relief is targeted toward low- and middle-income individuals, the tax credit is limited to the lesser of either the actual markup paid or 30% of the individual’s taxable income, based on the defined size limits of the property.
This move is part of the government’s broader initiative to expand access to affordable housing and reduce the financial burden on individual taxpayers investing in modestly sized residential units.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
