KP Property Tax Calculator for Shops and Commercial Buildings: Locality Factors A1 to D, Peshawar Rates and District Rebates
KP property tax on shops: plot sq yards plus covered sq ft times a locality factor of 5 to 20. Peshawar rates, 20% and 30% rebates and worked examples inside.
Property tax on a shop or office in Khyber Pakhtunkhwa is worked out with one formula: plot area in square yards plus covered area in square feet, multiplied by a locality factor from 5 to 20. In Peshawar the full factor applies, divisional headquarters get 20% off and every other district 30% off.
So a ground floor shop in a Peshawar A1 locality on a 50 square yard plot with 400 square feet covered pays (50 + 400) x 20, which is Rs 9,000, by our arithmetic. We read the Excise, Taxation and Narcotics Control Department KP's Schedule-II page on 2 November 2026. Below are all the factors, how upper floors and basements are counted, the special rules for banks, schools, factories and towers, and the 20% early payment rebate.
KP commercial property tax uses five locality categories, A1 to D
The government places every commercial area in category A1, A, B, C or D, depending on location, value, the business done there, rental value and civic amenities. Each category has a factor per floor. A1 ground floor is 20, and the lowest factor anywhere is 5.
| Category | Ground | Basement | 1st | 2nd | 3rd | 4th | 5th | Above 5th |
|---|---|---|---|---|---|---|---|---|
| A1 | 20 | 18 | 18 | 16 | 14 | 12 | 10 | 8 |
| A | 15 | 13 | 13 | 11 | 9 | 7 | 5 | 5 |
| B | 10 | 8 | 8 | 7 | 6 | 5 | 5 | 5 |
| C | 7 | 5 | 5 | 5 | 5 | 5 | 5 | 5 |
| D | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 |
Your category is set by the government for your area, not chosen by you. If your bill says A while the shops around you are B, that is the first thing to question.
How to calculate KP property tax on a shop, step by step
Add the plot area in square yards to the covered area in square feet, then multiply by the factor for the floor and category. The plot area counts once only, on the ground floor or basement. Upper floors use covered area alone. Then take off the district rebate.
- Find your category (A1 to D) from your bill or the Excise office.
- Measure the plot in square yards and the covered area of each floor in square feet.
- Leave out passages, washrooms and other public utilities. Count open sheds and verandas at half their size.
- Ground floor or basement: (plot area + covered area) x factor. Each upper floor: covered area x that floor's factor.
- Add the floors, then take 20% off in a divisional headquarters or 30% off in any other district. Peshawar gets no rebate.
Worked examples for Peshawar and other districts
The same building pays least in an ordinary district and most in Peshawar. A two storey A1 shop with a 50 square yard plot and 400 square feet on each floor comes to Rs 16,200 in Peshawar, Rs 12,960 in a divisional headquarters and Rs 11,340 elsewhere, by our arithmetic.
| Building | Peshawar | Divisional HQ (20% off) | Other district (30% off) |
|---|---|---|---|
| A1, ground only: (50 + 400) x 20 | Rs 9,000 | Rs 7,200 | Rs 6,300 |
| A1, ground plus 1st: 9,000 + 400 x 18 | Rs 16,200 | Rs 12,960 | Rs 11,340 |
| B, ground only: (50 + 400) x 10 | Rs 4,500 | Rs 3,600 | Rs 3,150 |
| D, ground only: (50 + 400) x 5 | Rs 2,250 | Rs 1,800 | Rs 1,575 |
These figures come from the published formula only. A real bill can differ if your covered area, category or exempt portions are measured differently, so keep your own measurements when you go to the Excise office.
Banks, schools, factories, service stations and towers follow other rules
Not every non-residential building uses the locality factor. Buildings used by government, banks, NGOs, guest houses, private companies and petrol or CNG stations pay 15% of the actual annual rent, under a written rent agreement shared with the assessing authority each year.
- Schools and colleges: covered area only, no plot area, then a special 30% rebate.
- Factory areas: a flat Rs 2.50 per square foot of each building. Offices, shops and godowns inside the compound use the commercial formula, and staff housing uses the residential schedule.
- Vehicle service stations: a flat Rs 20,000 a year.
- Mobile phone towers: Rs 40,000 a year in the provincial headquarters, Rs 30,000 in divisional headquarters and Rs 20,000 in district headquarters.
Homes follow Schedule-I instead, including the 5 marla self-occupied exemption explained in the guide to the KP property tax arrears rebate.
Pay for the whole year by 31 December and take another 20% off
The KP page says a 20% rebate is "admissible to those assesse who pay the tax in advance for the whole year by 31st day of December of the year". So a Peshawar A1 shop billed Rs 9,000 would pay Rs 7,200 if it clears the full year in time, by our arithmetic.
The 30% arrears rebate in the KP Finance Act, 2026 is a different benefit and covers residential arrears only, so commercial owners should not count on it. Shop owners in KP may also owe KP professional tax, which is a separate tax.
Common questions
What is the locality factor for an A1 shop in Peshawar?
20 on the ground floor, 18 in the basement and on the 1st floor, falling to 8 above the 5th floor.
Is the plot area counted on every floor?
No. The plot area in square yards is counted once, on the ground floor or basement. Upper floors use covered area only.
How much rebate do shops outside Peshawar get?
20% in divisional headquarters and 30% in every other district of KP.
How are verandas counted?
Open sheds and verandas count at half their area. Passages and washrooms are left out.
Do banks pay by the locality factor?
No. Buildings used by banks and similar bodies pay 15% of the actual annual rent.
How we verified this
What we checked, where we read it, and what we could not confirm.
Last checked 2 November 2026. We read Schedule-II of the Urban Immovable Property Tax on the Excise, Taxation and Narcotics Control Department KP website, and its homepage for the department's contact details. All examples are our own arithmetic from that page. The department's page does not show the date of the schedule, and we did not compare it line by line with the Gazette text of the KP Finance Act, 2026.
About the author
Global Affairs & Political Economy Writer
Muhammad Hatim is a book lover who started writing because he enjoys it. At Pakistan Era he writes about international relations, geopolitics and the global economy, with a particular interest in South Asia and the forces behind current events.
