Rental Commission in Islamabad, Lahore and Karachi Compared

Rental commission in Pakistan isn't one number. The same apartment can cost a tenant half a month's rent in commission in Islamabad and a full month in Lahore or Karachi, and whether the landlord pays as well depends on the city and the area. For tenants moving cities, landlords listing a property and new dealers setting their fees, these differences add up to tens of thousands of rupees on a single deal.

This guide compares the common rental commission customs in Islamabad, Lahore and Karachi, works through the same rental in each city, and explains the tenancy rules dealers and tenants must follow. For the full picture of how dealers are paid, see our real estate agent guide.

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Rental Commission at a Glance

Important: these are market customs, not legal rates. No current law in these cities sets a rental commission rate, and every rate is negotiable. Always agree the amount, and who pays it, in writing before the first viewing.

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Is Rental Commission Set by Law?

No. Commission on rentals, like commission on sales, is set by local custom and agreement. Punjab's real estate agents law lets the provincial government prescribe a maximum commission rate, but we couldn't find a currently notified cap.

What the law does regulate is the tenancy itself, and dealers who arrange rentals need to follow those rules:

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Islamabad: Half a Month From Each Side

In Islamabad, the most common rental commission is half a month's rent from the tenant and half a month's rent from the landlord. In some sectors and for some properties, dealers charge a full month from one or both sides, especially for furnished or high-end units.

The rules that apply: under the Islamabad Rent Restriction (Amendment) Act, 2021:

• Written agreement: a landlord must not let out premises except under a written tenancy agreement.
• Filing with the Controller: the landlord must submit the agreement to the Controller within 30 days. The Controller records the details, stamps the agreement and keeps a copy, and that copy serves as proof of the tenancy.
• Payment: rent must be paid by crossed cheque or against a proper receipt.
• Increases: rent increases by 10% at the end of each year unless landlord and tenant agree otherwise in writing.
• Disputes: a Mediation Council can settle landlord–tenant disputes.

A dealer arranging an Islamabad rental should make sure the agreement is written, signed and ready for submission to the Controller.

For examples of Islamabad rents by property type, see our guide to flats for rent in G-11.

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Lahore: Around One Month's Rent

In Lahore, rental commission is commonly around one month's rent, often charged to the tenant. In some areas and on some properties, dealers also charge the landlord. Rates vary between areas such as DHA, Bahria Town, Gulberg, Johar Town and Model Town, and between dealers.

The rules that apply: the Punjab Rented Premises Act, 2009 governs tenancies across Punjab, including Lahore and Rawalpindi. It's built around written tenancy agreements and their registration with the Rent Registrar. Dealers should make sure every tenancy they arrange is documented in writing and that the landlord knows the registration requirement.

Rawalpindi dealers also work under the Punjab Act. Commission practice in Rawalpindi varies by area and society, so agree the rate and who pays in writing before viewings.

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Karachi: Around One Month Per Side in Many Areas

In Karachi, rental commission is commonly around one month's rent from each side in many areas. In some areas, only the tenant pays. Practice can differ between DHA, Clifton, Gulshan-e-Iqbal, PECHS and other neighbourhoods.

The rules that apply: the Sindh Rented Premises Ordinance, 1979:

• Written agreement: the tenancy agreement must be in writing.
• Attestation: where the agreement isn't registered, it must be attested by the Controller (or a Civil Judge or First Class Magistrate).
• Increases: rent increases are limited, and an increase can't exceed 10% a year on the existing rent.
• Receipts: landlords must acknowledge rent payments in writing.

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Milkiyat.com Finding: The Same Rs 1 Lakh Rental in Three Cities

Here's an illustrative comparison of the same rental in each city. It uses the common customs described above. Actual commission varies by area, property and dealer.

Assumptions

• Monthly rent: Rs 1,00,000 in all three cities
• Security deposit: 2 months' rent in all three cities, so commission is the only difference
• Islamabad: half a month from each side
• Lahore: one month from the tenant only
• Karachi: one month from each side

Commission per side

Tenant's upfront cost to move in (first month's rent + deposit + commission)

Commission as a share of the tenant's first-year rent

• First-year rent: Rs 1,00,000 × 12 = Rs 12,00,000
• Islamabad: Rs 50,000 ÷ Rs 12,00,000 = 4.2%
• Lahore and Karachi: Rs 1,00,000 ÷ Rs 12,00,000 = 8.3%

What it shows

• A tenant moving from Islamabad to Lahore or Karachi with the same rent could pay Rs 50,000 more in commission (Rs 1,00,000 − Rs 50,000).
• A Karachi landlord on a two-sided custom pays Rs 1,00,000, while a Lahore landlord on a tenant-only custom pays nothing.
• On the same rental, a Karachi dealer on a two-sided custom earns twice what an Islamabad or Lahore dealer earns: Rs 2,00,000 vs Rs 1,00,000.

These differences are why every rental commission should be written down before viewings.

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Other Rental Commission Questions

Do dealers charge commission on renewal?

Some do, some don't. If the same tenant renews with the same landlord, there's no new matching work, so many tenants and landlords negotiate no commission or a reduced fee. Agree this in the original arrangement.

Is commission different for commercial rentals?

Often, yes. Shops, offices and warehouses usually carry longer leases and higher rents, and commission terms are negotiated case by case.

When should commission be paid?

When the tenancy agreement is signed and the keys are handed over, not at the first viewing. Get a receipt that shows the amount and the property.

What about the security deposit?

The deposit belongs to the landlord to hold as security, not to the dealer. It should be written into the tenancy agreement, with the terms for returning it.

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Tips for Tenants and Landlords

For tenants

• Ask the dealer's commission and who pays it before the first viewing
• Confirm the landlord owns the property, or is authorised to let it
• Make sure the tenancy agreement is written and signed, and filed or attested as your city's law requires
• Pay rent by bank transfer or crossed cheque, or against a receipt

For landlords

• Agree whether you'll pay commission, and how much, in writing
• Screen tenants: identity, employment and references
• Keep a written tenancy agreement and comply with your city's filing or attestation rules
• Give written receipts for rent

Our buyer's checklist for property dealers works for tenants too: check the dealer's identity, office and registration before paying anything.

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For Dealers: Rentals and Your Income

Rentals give dealers steadier income than sales, but smaller amounts per deal. Our breakdown of property dealer monthly income shows how rentals often cover an office's running costs, while sales provide the profit. For sale commission rates and the law on commission, see our guide to property dealer commission.

To find rental agents who know your area, browse Milkiyat's agent directory, or start with agents in Islamabad and Rawalpindi agents.

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FAQs

1. How much is rental commission in Pakistan?

It depends on the city and area. Commonly, Islamabad dealers charge half a month's rent from each side, Lahore dealers around one month's rent (often from the tenant), and Karachi dealers around one month from each side in many areas. These are customs, not legal rates.

2. What is half month rent commission?

It's the common Islamabad custom where the dealer charges half of one month's rent to the tenant and half to the landlord, so the dealer receives one month's rent in total.

3. Does the landlord pay commission on rent?

In Islamabad and many Karachi areas, yes. In Lahore, it's often the tenant only. Agree it in writing before the deal.

4. Is there a legal limit on property dealer commission on rent?

We couldn't find a currently notified legal cap. Punjab's real estate agents law allows the government to prescribe a maximum rate, but rates are currently set by custom and negotiation.

5. Does a tenancy agreement have to be in writing?

Yes, in Islamabad and Karachi under their rent laws, and Punjab's rent law is also built around written tenancy agreements and their registration.

6. Can rent be increased every year?

In Islamabad, rent increases by 10% each year unless both parties agree otherwise in writing. In Sindh, increases are limited to 10% a year. Check the terms of your agreement and your city's law.

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Conclusion

Rental commission in Pakistan follows city customs: half a month per side is common in Islamabad, around a month in Lahore (often from the tenant) and around a month per side in many parts of Karachi. On a Rs 1 lakh rental, that can mean a Rs 50,000 difference for the tenant and a Rs 1 lakh difference for the landlord. Whatever the city, agree the fee in writing, pay against a receipt, and make sure the tenancy agreement meets local law.

Find rental specialists in your area on Milkiyat.com and compare their listings and reviews before you start viewing.

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Disclaimer

This guide is for general information only. Rental commission rates are market customs that vary by area, property and dealer, and they change over time. Rent laws and their requirements also change. Confirm current rules with the Rent Controller or Rent Registrar in your city and a qualified lawyer. The worked comparison is illustrative. Milkiyat.com does not provide legal, tax or financial advice.

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Sources

• National Assembly of Pakistan, Islamabad Rent Restriction (Amendment) Act, 2021

• Sindh Judicial Academy, Sindh Rented Premises Ordinance, 1979