Finance Minister announces foreclosure laws to boost bank-led housing financing

Finance Minister Muhammad Aurangzeb announced that the government would introduce foreclosure laws to encourage bank-led financing in the housing sector, aiming to improve access to financing for homeowners and boost the housing market. 

He also revealed that a new mechanism would be developed to eliminate non-filers and document the cash economy, ensuring a broader tax base. 

Additionally, the government has allocated Rs 5 billion for a mark-up subsidy on housing schemes in collaboration with the State Bank of Pakistan (SBP).

Aurangzeb made these statements during a briefing to the Senate Standing Committee on Finance and Revenue, where the committee convened to review the Finance Bill, 2025, in line with Article 73 of the Constitution. The meeting was chaired by Saleem Mandviwalla. 

The finance minister shared that no new taxes were imposed in the budget, but Rs 312 billion in new tax measures were introduced through compliance and enforcement, as part of the government’s commitment to the IMF.

Addressing the ongoing economic challenges, Aurangzeb provided an overview of Pakistan’s recent economic performance, noting a 7.8% increase in exports during the current fiscal year. 

He reported that exports had reached $30 billion in 11 months, surpassing last year’s total of $29 billion. The finance minister also dispelled concerns about the availability of Letters of Credit (LCs), assuring the committee that there were no longer any obstacles to their opening.

On privatisation, Aurangzeb acknowledged that privatisation targets had not been met, but reassured the committee that Pakistan International Airlines (PIA) had now been re-entered into the privatisation process. He also addressed the longstanding issue of agricultural taxation, asserting that the provinces would begin collecting agricultural income tax starting July 1, 2025, in line with the government’s efforts to enhance tax compliance.

In a diplomatic update, the minister mentioned the recent approval of $700 million for the Reko Diq project, a major development that is expected to generate exports worth $2.8 billion by 2028. Despite India’s attempts to block the funding, the World Bank Board’s approval of the financing was seen as a significant victory for Pakistan.

Aurangzeb concluded the briefing by emphasising that the government’s focus is on addressing fiscal challenges and implementing reforms to stabilise the economy, particularly in the housing sector, which would benefit from the upcoming foreclosure laws and related initiatives.