Finance

A Comprehensive Guide On Buying Land In Nepal

Real estate is on the rise in Nepal, especially Kathmandu. Landowners left and right is getting richer while the demand for land keeps on rising. As the population trends upwards and money enters the real estate market, buying land in Nepal has almost become a trend in Kathmandu.

If you are one of the people who are thinking of buying land, you certainly have a ton of unanswered questions about it. This article is meant to answer some of those queries and provide you with a better understanding of buying land in Nepal, procedures, and why the market is thriving.

Land Costs

One of the most basic things when considering buying land in Nepal, is, of course, the prices. Everyone should aim to have a good understanding of factors that determine the prices of anything that they buy, land is no different.

How Land Costs are Determined

Like any other market, buying land in Nepal is primarily driven by demand and supply. This means that the more people want to buy land, the higher up the prices will go. Digging deeper, more people want to land in urban areas, hence the huge price tags in city centers. Likewise, rural areas will likely have fewer costs. On the flip side, the more people invest in land, the higher up prices will go. It goes on in an endless loop because people invest in land with higher demand and the prices just keep going up.

Why are Land Prices Growing Rapidly?

Nepal has seen quite the revolution in the real estate market, especially in the last decade or so. We discussed demand and supply factors.

First of all, people are buying land in Nepal more and more, and not necessarily for private purposes. Nowadays people are buying land as an investment for future security. This is primarily driven by low tax rates for buying or holding property. On top of that, since the value of land hardly ever depreciates, more and more people pour money into it. That same investment, in turn, amplifies itself and drives up prices. The growing population and the demand for private homes certainly don’t help either.

Land Prices Comparison

We can see now that the closest land is to marketplaces or city centers, higher up their prices will go. Hence in the context of Kathmandu, you can compare prices as they move more and more in the heart of the city.

On the outskirts of the town around Lubhu, Thankot, Chobar prices are around 5-10 lakh per anna.
As you move closer into the city at around Teku, Kalanki, prices go up to 10-15 lakh per anna.
In relatively far residential areas like Thali, prices are at 20-30 lakh.
In popular residential areas like Sanepa, Bhaisepati, land prices skyrocket to 40-50 lakh per anna. After that, you go a steep hill up.
Prices may exceed more than 60-80 lakh per anna on city centers like Putalisadak and on major marketplaces like New Road, the prices could exceed 1 crore per anna.

Making Smart Decisions

As I have mentioned already, buying land in Nepal is a lifelong investment, and if you don’t choose wisely, you might end up in massive debt and financial pressure. You would be surprised to know how many people miss even the most basic checklist while applying for land. Here are some things you should be thinking about.

Research

Research is essential in any financial decision, and real estate is a big one. Look around the neighborhood, talk to people around the land, get as much information as you can about the location. You should have ample information about both your seller and the land so that you can make the right decision without having to regret it later.

Think Ahead

Buying land in Nepal is a long-term investment. You should be thinking 10, 20 years into the future. If you are keeping the property as security, see how the location will develop in the coming years so that you pick a property that yields the highest interest over time. If it is for private use, think about how the neighborhood is projected to develop as years pass by.

Manage Your Finances

If you are taking a loan, think about the fact that you might not be able to pay it. If you are spending your own money, consider what other factors may affect you in the long term. The land is not a liquid property and reselling it quickly is almost impossible. Since it is such a “fixed” decision, so to say, you should manage your finances properly while buying property.

Legality and Taxes

The process of buying land in Nepal is not easy. You have to go through several government offices to properly register the land and transfer the ownership of property.

Procedure Outline

The easy way is to hire a real estate company, and they will figure out all the procedures for you, you just need to sign stuff.

But if you want to do it the old-fashioned way, after you have agreed on a price with the seller, you will need to apply for an appointment in the Department of Land Reform and Management. You can submit the application online through this website. Your seller and you will meet there in the presence of a lawyer (bring your own if you have one) and the process will start. There are several registration fees and other taxes that you need to pay too.

Registration Fees

This amount is paid when selling land to a new owner. If you are a buyer, your seller might ask you to cover these costs too.

PROPERTY VALUE, NPR	RATE
Up to 10,000	NPR400
10,000 – 25,000	NPR1,000
Over 25,000	4.50%

Tax on Possession

This is the tax amount that you will have to pay every year on account of gaining ownership of the property. There are two types of this: municipal house tax, and Property tax.

Municipal House tax

Class	Type of House	Tax Rate per sq ft
A	Raw bricks with mud mortar or made of wood (timber)	NPR 450
B	Kiln bricks/stones with mud mortar	NPR 525
C	Kiln bricks/stones with cement mortar	NPR 575
D	RCC frame structure	NPR 635

Property Tax

Property Valuation	Tax Rate
Up to NPR 1 million	None
NPR 1-2 million	NPR 300
NPR 2-3 million	0.05%
NPR 3-5 million	0.25%
NPR 5-10 million	0.50%
More than NPR 10 million	1.50%

Final Thoughts

In this guide, we have laid out all the prerequisite information you need to buy land and all the extra costs that you may incur. We hope that you now have a better understanding of processes, and fees related to buying real estate in Nepal. Don’t forget to note all the things you need to keep in mind while buying. Good luck!