Islamabad offers incentives to spur larger hotel projects

“Islamabad has introduced a relief package for hotel developers by easing FAR charges after cabinet approval.”

— Editorial Team

Key points

Islamabad has introduced a relief package for hotel developers by easing FAR charges after cabinet approval.
Officials say the move is designed to attract investment, promote vertical growth and expand hospitality infrastructure under strict compliance rules.

Business|By Editorial Team|Published 27-Mar-26|Latest update 3/27/2026, 9:41:08 AM|1 min read

The Capital Development Authority has unveiled a time-bound relief package for the hotel sector in Islamabad after securing federal cabinet approval. The measure centers on the rationalization of Floor Area Ratio charges, allowing hotel and motel projects to seek additional built-up area under a regulated framework.

Officials said the package is intended to encourage vertical development, attract fresh investment and support the expansion of hospitality infrastructure in the capital. The relief will remain available until December 31, 2028, giving developers a defined period to either enlarge existing projects or launch new ones under the revised policy.

The CDA said the incentive applies specifically to projects requesting extra floor area and is part of a wider push to improve the business climate while promoting higher-quality urban development. To enforce compliance, developers will be required to furnish a bank guarantee or performance bond equal to the value of the additional FAR granted.

Authorities warned that any delay, breach of conditions or failure to meet deadlines could lead to withdrawal of the relief and immediate recovery of applicable charges. The facilitation is also tied to specific projects, meaning any unauthorized transfer or ownership change would cancel the concession.