Property Registration Fee + Capital Gains Tax When Buying or Selling Land or a House in Nepal

When land or a house changes hands in Nepal, the total transfer cost is made up of two government charges plus a few small soft costs. The first charge is the registration fee (rajistrasan dastur), paid by the buyer, calculated as a percentage of the value of the property. The second is capital gains tax (CGT), paid by the seller on the profit made on the sale. On top of these come minor costs such as the ward or municipality road-access recommendation (ghar-bato sifaris), a deed writer (lekhandas) or lawyer's fee, photographs and photocopies.

Both government charges are calculated on the higher of two numbers: the price the buyer and seller actually declare in the deed, or the government minimum valuation (nyuntam mulyankan), popularly called the malpot rate, that the Land Revenue Office holds for that plot. The minimum valuation is a legal tax floor set ward by ward and road by road; it is explained in detail on the separate malpot-rate page and is not repeated here. What matters for this page is that it fixes the base on which both the fee and the tax are computed, so a low declared price cannot pull either charge below the minimum.

A quick way to estimate the total: take the taxable value (the higher of declared price or minimum valuation), multiply by your municipality's registration-fee percentage for the buyer, and separately apply the capital-gains rate to the seller's actual profit. Both charges are usually settled at the Land Revenue Office (Malpot Karyalaya) at the moment of registration, and the office will not complete the transfer or issue the new ownership certificate (lalpurja) until they are paid. The exact percentages are fixed by the annual Finance Act and by local-government decisions, so always confirm the current figure for your municipality and fiscal year before you budget.

The registration or transfer fee is paid by the buyer and is charged as a percentage of the taxable value. Because local governments set this fee under the Local Government Operation Act, 2074 BS (2017 AD), the exact percentage varies by municipality and can be adjusted through annual local finance ordinances. There is therefore no single national figure, and the numbers below are the common, widely reported pattern rather than a guaranteed rate for your specific local level.

As a typical pattern, the fee is around 5 percent in metropolitan cities, about 4.5 percent in sub-metropolitan cities, about 4 percent in municipalities (nagarpalika) and about 2 percent in rural municipalities (gaunpalika). Registered apartments (flats) are deliberately charged much less, commonly around 1 percent, to encourage vertical housing, and group (planned) housing is often around 2 percent. This is why a Rs 1 crore apartment can register far more cheaply than a Rs 1 crore plot of open land in the same city.

The fee is a percentage of the base value, so it scales directly with the plot's minimum valuation or declared price. On a plot with a taxable value of Rs 1 crore in a metropolitan city, a 5 percent fee is Rs 5 lakh; the same value in a rural municipality at 2 percent is Rs 2 lakh. Confirm the live percentage with your Land Revenue Office, because a metropolitan council can and does set a different rate from a neighbouring municipality.

Nepal offers a long-standing concession to encourage property ownership by women: land or a house registered in a woman's own name receives a discount on the registration fee. The commonly reported concession is about 25 percent off the fee in metropolitan, sub-metropolitan and municipal areas and about 30 percent off in rural municipalities. On a Rs 1 crore metropolitan plot, that turns a 5 percent (Rs 5 lakh) fee into roughly Rs 3.75 lakh — a saving of about Rs 1.25 lakh. The concession lowers the fee only; it does not reduce the seller's capital gains tax and, in the Kathmandu Valley, it does not waive the surcharge described below.

Inside the Kathmandu Valley (Kathmandu, Lalitpur and Bhaktapur districts), transfers attract an additional Bagmati Sabhyata Kosh (Bagmati civilisation fund) surcharge. This is commonly reported as an extra amount equal to about 5 percent of the registration fee itself — not 5 percent of the property value. So on a Rs 5 lakh registration fee, the surcharge is about Rs 25,000. It is mandatory within the Valley and is generally not reduced by the women-buyer concession or the lower apartment rate.

These concessions and surcharges are policy tools that change over time and differ by province and local level, and other provinces or municipalities may run their own funds or rebates. Treat the percentages here as the current common pattern, and confirm the exact concession and any surcharge with the Land Revenue Office that holds your plot's records before you rely on the figure.

Capital gains tax is paid by the seller on the profit (gain) from disposing of land and buildings, which the Income Tax Act, 2058 BS treats as a non-business chargeable asset for a natural person. The important recent change is that the Finance Act 2083 raised the rates for FY 2083/84 (2026/27), effective from Shrawan 1, 2083 (16 July 2026). For a resident individual, the current rate is 7.5 percent of the gain if the property was owned for more than five years, and 10 percent if it was owned for five years or less.

These rates are up from the previous FY 2082/83 figures of 5 percent (held more than five years) and 7.5 percent (held five years or less). A separate, concessional 2.5 percent rate applies where land is disposed of involuntarily through government compulsory acquisition for a development project. Companies and other entities, and non-resident sellers, are generally taxed at a flat 10 percent regardless of holding period. The base rates written into the Income Tax Act itself (Section 95A) are lower — historically 2.5 and 5 percent — but the annual Finance Act overrides them, which is why the headline rate has risen over successive budgets. Because rates change every fiscal year, verify the figure in force with the Inland Revenue Department before you calculate.

The tax is charged on the gain, not the whole sale price. The gain is the taxable sale value (again, the higher of the declared price or the government minimum valuation) minus the cost of acquisition and minus eligible improvement and transaction costs. For individuals the Land Revenue Office normally collects the tax at the point of registration and it counts as the final tax, so there is usually no separate return to file for the sale.

The taxable gain is the sale value minus what the property cost you to acquire and improve. Deductible items typically include the original purchase price as recorded, the registration fee you paid when you bought it, documented construction or improvement costs, and eligible transaction expenses such as legal or broker fees where supported by receipts. This is why the value you declare when buying matters: declaring a low purchase price today reduces the fee now but inflates the taxable gain — and the tax — when you eventually sell, because the recorded cost base is lower.

Some transfers are exempt or fall outside capital gains tax. Small disposals of land or buildings below the statutory threshold (commonly cited as around Rs 10 lakh) are generally not treated as a chargeable asset. A genuine private residence that the owner has held and lived in continuously for at least ten years is also treated leniently under the Act's definition of a private residence. Transfers by gift or inheritance between close family members are exempt, but the tax is not erased forever — it revives on the eventual sale of the property to a third party, calculated from the original cost base.

The precise thresholds, the private-residence test and the list of allowable deductions are set in the Income Tax Act and refined by the Finance Act and Inland Revenue Department rulings, and they carry conditions that can trip up a self-calculation. Treat the exemption figures above as indicative and confirm your specific case with the Inland Revenue Department (IRD) or a tax professional, keeping every purchase deed, registration receipt and construction bill to support your cost base.

Suppose Sita buys a plot in a metropolitan city with a government minimum valuation of Rs 1 crore, and the parties declare that price. As the buyer, her registration fee at 5 percent is Rs 5 lakh. Because the plot is registered in her name, the women-buyer concession of about 25 percent lowers it to roughly Rs 3.75 lakh. Inside the Kathmandu Valley she would also pay a Bagmati Sabhyata Kosh surcharge of about 5 percent of the fee — around Rs 25,000 on the pre-concession fee — on top. Her total buyer-side outlay is therefore roughly Rs 4 lakh in government charges, plus small soft costs.

Now suppose the seller, Ram, originally bought the same plot six years earlier for a recorded Rs 40 lakh and can document Rs 5 lakh of improvements. His taxable gain is Rs 1 crore minus Rs 40 lakh minus Rs 5 lakh, which is Rs 55 lakh. Because he held it more than five years, the FY 2083/84 rate is 7.5 percent, giving a capital gains tax of about Rs 4.125 lakh, normally withheld at the Land Revenue Office when the transfer is registered.

In this example the total government take on the transaction is roughly Rs 4 lakh from the buyer and about Rs 4.1 lakh from the seller. Change any input and the answer changes: a rural municipality would use a 2 percent fee, a plot held under five years would face the 10 percent capital-gains rate, and a higher recorded purchase price would shrink the taxable gain. These figures are illustrative to show the method, not a quote for any real plot — always run your own numbers on the current, official rates.

The convention is clear: the buyer bears the registration fee (and any Kathmandu Valley surcharge and soft costs), while the seller bears the capital gains tax on the profit. In practice the two sides sometimes negotiate who absorbs which cost as part of the price, but the legal liability falls this way, and the Land Revenue Office collects both at registration before it mutates ownership (dakhil kharej) and issues the new lalpurja.

To budget accurately, start from the government minimum valuation for the plot, since that usually sets the floor for both charges. Confirm the buyer's fee percentage with the specific municipality, apply the women-buyer concession if the buyer is a woman, and add the Bagmati surcharge inside the Kathmandu Valley. For the seller, work out the true gain from documented costs and apply the current-year capital-gains rate for the correct holding period. The Department of Land Management and Archive (DoLMA) and several municipalities publish online registration and capital-gains calculators that can give a quick estimate.

Two final cautions for this money-and-tax decision. First, rates and thresholds are reset each fiscal year by the Finance Act and by local councils, so a figure from last year may be out of date — always check against the current year, which begins on Shrawan 1 (mid-July). Second, when real money is at stake, confirm the live percentages and any exemption directly with the Inland Revenue Department (for capital gains) and the Land Revenue Office (for the registration fee), rather than relying on a blog, a calculator, or this summary alone.