Nepal Property Tax Guide

Property Transfer Tax (Acquisition)

• Transfer tax — 4% to 6%: When purchasing property, the buyer pays a transfer tax consisting of registration fees and stamp duty. The total rate varies by municipality: typically 4% in Kathmandu Metropolitan City and 5-6% in other municipalities. The tax is calculated on the government-fixed minimum valuation or the actual purchase price, whichever is higher.
• Components: The transfer tax includes: land revenue registration fee (approximately 2-3%), stamp duty (approximately 2-3%), and municipality development fees (variable). Additional charges may include capital gains tax withholding (if applicable) and documentation fees.
• Payment process: Transfer tax is paid at the Land Revenue Office (Malpot) during the property registration process. The property cannot be legally transferred until all taxes are paid and the registration is completed.
• Exemptions: Transfers between close relatives (spouse, parents, children) may be eligible for reduced rates or exemptions on stamp duty. Gifts to charities registered in Nepal may also qualify for relief.

Annual Land Tax

• Annual land tax — NPR 2,000 to 50,000: Property owners pay an annual land tax to the local municipality. The amount depends on the location (urban vs. rural), land size, land type (residential, commercial, agricultural), and the municipality's tax schedule. Urban commercial land attracts the highest rates.
• Assessment: The tax is assessed based on the land area (square metres) and the zonal classification of the property. The municipality publishes annual tax rates. Typically, residential land in Kathmandu valley costs NPR 5,000-20,000 per year for an average plot.
• Payment: Annual land tax is paid at the respective municipality office (Nagarpalika/Gaunpalika). Late payment attracts a penalty of up to 20% of the tax due.
• Building tax: Some municipalities also levy an annual building tax based on the constructed area and type of construction (residential, commercial, industrial). This is separate from land tax.

Capital Gains Tax on Property

• CGT rate — 5% or 10%: Gains on property sales are taxed at 10% for property held under 5 years and 5% for property held over 5 years. The primary residence is exempt.
• Withholding: The buyer typically withholds the CGT from the sale consideration and remits it to the IRD. The seller receives a certificate of tax deduction (which can be used as proof of tax payment).
• Indexation: No indexation allowance is available — gains are calculated on nominal terms. This means inflation can increase the effective tax rate on real gains.

For detailed CGT rules and primary residence exemption, see our Capital Gains Guide →. For rental income taxation, see our Rental Income Guide →.