By Fakhar-e-Alam PESHAWAR, Jun 14 (APP):For years, government employee Nasir Ali has watched his yearly rent climb steadily higher while his salary barely keeps pace with rising living costs in Khyber Pakhtunkhwa. “Every year, I see my rent increase while my salary remains the same as the construction of my own house becomes difficult due to the rising cost of land and building materials in KP,” he said while talking …
Houses for all: Federal budget offers new hope to families dreaming of a home
By Fakhar-e-Alam
PESHAWAR, Jun 14 (APP):For years, government employee Nasir Ali has watched his yearly rent climb steadily higher while his salary barely keeps pace with rising living costs in Khyber Pakhtunkhwa.
“Every year, I see my rent increase while my salary remains the same as the construction of my own house becomes difficult due to the rising cost of land and building materials in KP,” he said while talking to APP at Peshawar. “It feels impossible to save money enough for a house of my own amid children’s education and health expenses, besides high rent every month.”
Like thousands of families across Khyber Pakhtunkhwa, Nasir dreams of owning a modest home—a place where his children can grow up without the uncertainty of frequent moves and rising rents.
For many low- and middle-income households and employees, that dream has remained frustratingly out of reach in the wake of rising inflation and price hikes in KP.
Now, the Federal Budget 2026-27 has brought renewed optimism by introducing a series of incentives aimed at revitalizing Pakistan’s construction and housing sectors, with the ultimate goal of making home ownership more accessible.
The budget proposes significant reductions in property transaction taxes for active tax filers. The withholding tax on property buyers has been cut from 2.5 percent to 1.25 percent, while the tax on sellers has been reduced from 5.5 percent to 2.75 percent, which was widely welcomed in Khyber Pakhtunkhwa.
In another major relief measure, the Federal Government has abolished the controversial deemed income tax on immovable properties under Section 7E of the Finance Bill 2026. Capital Value Tax on declared foreign properties has also been removed, while revisions in capital gains tax calculations for inherited properties are expected to lessen the financial burden on heirs.
For construction workers, contractors and businesses linked to the housing industry, the measures signal new opportunities.
“The federal government’s relief package is a landmark step toward providing affordable housing for everyone,” says house contractor Wisal Khan at Peshawar.
“The construction sector creates jobs for millions and supports industries such as cement, steel, transport and furniture.”
Housing experts believed the reforms could stimulate investment and encourage documentation of the real estate market while easing pressure on genuine taxpayers.
Yet behind the economic figures lies a much deeper social challenge amid the rising housing backlog in Khyber Pakhtunkhwa.
According to housing estimates, millions of additional housing units will be needed over the coming decades to accommodate population growth and urban migration.
Professor Dr Muhammad Naeem, former chairman of the Economics Department at the University of Peshawar, said that affordable housing remains one of the country’s most pressing development issues.
“Affordable housing is a fundamental right of every citizen,” he said. “Rapid population growth, migration from rural areas to cities for better facilities, and soaring land and construction costs have contributed significantly to the housing backlog.”
He said that many countries have attempted to solve housing shortages by building low-cost housing on city outskirts, where land is cheaper. However, residents often become disconnected from jobs, transport networks and social services.
“In developing countries like Pakistan, cities are expanding so rapidly that infrastructure cannot keep pace,” he explains. “This often results in informal settlements and overcrowded communities on urban fringes.”
The challenge is particularly visible in Khyber Pakhtunkhwa, where urban populations continue to rise in cities such as Peshawar, Mardan, Abbottabad, Swat, Kohat, Dera Ismail Khan and Nowshera.
In Peshawar, housing prices have surged beyond the reach of many families.
A five-marla house can cost more than Rs 50 million, while monthly rents have climbed above Rs 40,000 in many areas.
For salaried workers and low-income households, such figures place home ownership far beyond their financial reach.
According to surveys conducted under the Pakistan Housing Programme, around 750,000 housing units are required in Khyber Pakhtunkhwa alone. Peshawar accounts for the largest share of the demand, followed by Swat and Mardan.
To address the growing housing shortage, the PM Housing Program was a ray of hope for poor people. Likewise, the Provincial Housing Authority (PHA) and KP government have launched a number of housing schemes across the province to provide affordable houses to the poor.
Among the largest projects is the Jalozai Housing Scheme in Nowshera, spread over 8,400 kanal, where around 9,000 housing units and 1,300 residential flats are planned.
Another major initiative is the Hangu Township project, expected to provide over 10,000 housing units.
High-rise residential developments are also planned in Peshawar, including low-cost flats at Nishtarabad, Warsak and Rehman Baba Complex. Special housing quotas have been earmarked in some projects for widows, persons with disabilities and other deserving groups.
PHA officials said thousands of low-cost flats are under construction, with subsidies being provided to eligible beneficiaries. In Jalozai, for example, each beneficiary is expected to receive a subsidy of Rs 300,000, while soft financing facilities are being offered through the Bank of Khyber.
Housing officials believed these initiatives, combined with the federal government’s tax incentives, could help narrow the housing gap and provide relief to families struggling to secure decent accommodation.
For people like Nasir Ali, however, the true measure of success will not be found in policy documents or budget speeches, but rather in the day they receive the keys to a home of their own.
“I just want a small house for my family,” he reiterated. “If these programmes work, it will change the lives of thousands of people like me.”
As KP grapples with rapid urbanisation and a growing housing deficit, the Federal Budget 2026-27 has raised hopes that affordable housing may move closer from aspiration to reality for many citizens and a day is near that Nasir, along with others, will become owners of houses
