Urban Immovable Property Tax

Schedule-II
(See section 3(2)

1. Building and lands within the limits of urban areas shall be divided into category A1, A, B, C and D by the Government , depending on location, value, type of business therein, rental value, civic amenities, and other variables related to immovable properties.

2. Buildings acquired for the use by Government, Semi-Government, Non-Governmental Organizations, Development Financial Institutions, private commercial organizations, guest houses, and petrol/CNG stations, or by Banks shall be assessed and taxed at the rate of fifteen percent of the actual annual rent. In case buildings other than those exempted under section 4 of the Act, which is owned and occupied by such organizations, the tax shall be levied on the assessed annual rental value of such buildings on the rate prescribed hereinbefore.

3. Both the parties shall enter into a written agreement in quadruplicate indicating annual rent to be derived, and share copy thereof with assessing authority on an annual basis.

Explanation: for this part, actual rent means annual rent agreed between the parties.

4. Buildings used as shops or for any other commercial activity not mentioned in clause 2 shall be divided into different locality factors namely A1, A, B, C, and D depending on the locality and area, and shall be assessed and taxed by method and rate prescribed in clause 5 below.

5. Tax for properties as per clause 4 shall be calculated with the following formula:

1. Plot area in square yards,

1. Covered area in square feet,
   1. Provided that passageways, washrooms and other public utilities shall not be counted while calculating/counting the covered area
   2. Provided further that open sheds and verandas shall be counted as half of its total measurement while calculating covered area.

• The formula for tax calculation shall be=(plot area in the square yard (a) + covered area in square feet (b) multiplied by locality factor (c)

1. Locality factors for computing tax liability as per clause 5(iii above, are given below in the table:

1. Provided that plot area in sq. yards will be counted once in the basement or on the ground floor as the case may be. For upper stories, i.e from floor  and onwards, only covered area will be taken into account, and the formula shall be:

Covered area in square feet (b) multiplied by locality factor (c) (bxc)

Provided that, the above tax rates shall be leviable in provincial headquarter only, that is for Peshawar. There shall be a rebate of 20% in respect of divisional headquarters and 30% rebate on the tax in respect of all remaining districts of the Province.

6. For Educational Institutions:

1. The tax shall be calculated based on the covered area only. The area of the plot as required per item 5(a) above shall not be taken for computing the tax. This is to encourage the institutions in providing sports and other recreational facilities to their students; and

1. The tax calculated based on (a) above shall get a special thirty percent rebate, being provided to all the educational institutions.

7. For Industrial properties within the rating area:

2. Industrial buildings within the limits of rating areas shall be assessed for the purpose of this tax at a flat rate of Rs. 2.50 per square foot of the each building in factory area. The provision of item 5(b) above shall be applicable to all the factory areas as well.
3. Provided that, all the residential buildings, Colonies, Hostels, Mess, schools, etc within the premises of the industrial compound shall be assessed and taxed as per existing Schedule-I (For residential buildings) of the Act. Similarly, all commercial buildings other than factory area including workshops, shops, godowns, Banks, petrol pumps, factory offices, mobile towers, etc situated within the industrial compound shall be assessed and taxed as per clause 3 to six above.

Explanation:  for this clause, the factory area shall mean a building or group of buildings wherein finished, semi-finished or raw goods are manufactured, processed, stock filed, or assembled.

8. Service Station of vehicles, irrespective of operating in addition to other services such as filling station or otherwise shall be charged a flat rate of Rs.20, 000 per annum.
9. A rebate at the rate of 20% of the tax assessed under sub-section(2) of Section 3 is also admissible to those assesse who pay the tax in advance for the whole year by 31st day of December of the year.

Buildings and Lands used for the erection of Mobile Phone Towers shall be assessed and taxed at the rates:

• Provincial Headquarter………………………………….Rs.40,000 per annum;
• (ii) Divisional Headquarter and ………………………Rs.30,000 per annum and; respective sub-urban areas
• (iii) District Headquarter and ………………………….Rs.20,000 per annum

and; respective sub-urban areas]