Finance Act 2025 offers tax relief on low-cost housing loans

July 2025

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As affordable housing becomes increasingly difficult to find in Pakistan, the government has decided to add measures to offer relief for housing loans. As per Section 63A of Finance Act 2025, low-cost housing loans will now enjoy a tax relief.

Thise paying interest on low-cost housing loans can now claim tax credit for interest paid on the said loan. They can now claim tax credit on profits paid n debt, rental share or appreciation on home value.

The new regulation is applicable on a housing loan that is obtained from a scheduled bank, from a government-affiliated organization or from a financial institution regulated by SECP (Securities & Exchange Commission Pakistan).

The relief will be given housing loans that cover houses of area 2500 square feet (approx. 10 marlas) or lower, or flats of area 2000 square feet or lower.

Maximum tax credit is capped at either 30% of the taxpayers’ income or markup paid on the loan, whichever is lesser.

Source:

https://bloompakistan.com/govt-offers-tax-relief-on-low-cost-housing-loans/