KATHMANDU, Nov 11: The government has decided to temporarily allow land fragmentation citing the delay in the categorization of the land-use areas.
The government in this regard has endorsed the third amendment to the Land Use Regulations 2022. Minister for Communication and Information Technology, Jagdish Kharel, informed that a Cabinet meeting held on Monday approved the amended regulation.
Introducing the Land Use Regulations 2022 three years ago, the Department of Land Management had asked land revenue offices around the nation not to fragment any piece of land without first classifying it and not to allow keeping those lands as collateral for loans until the classification has been done.
Land fragmentation halted in six local bodies of Taplejung
The law has divided land into 10 categories based on their features and geographic situations. It categorises the land into categories such as agricultural, residential, commercial, industrial, mines, forests, public use and cultural-archeological, among others.
Likewise, the regulations have barred the land under one category from using for other specified purposes. However, it has maintained the provisions for land-pooling to promote mechanization of agriculture and control land fragmentation.
Local governments were initially expected to complete this classification within six months. However the work has been progressing at a snail’s pace even after undergoing extension of multiple deadlines. As per the government records, only 161 local bodies completed the task as of April 2023.
Many local governments requested multiple extensions, citing resource constraints, technical limitations, and difficulties in forging local consensus. Even after three years of enforcing the regulations, only 253 municipalities out of 753 local levels across the country have fully classified land till date.
Subsequently, the then government led by Pushpa Kamal Dahal two years ago lifted the ban on land fragmentation across the country, citing that the step could help improve financial transactions, which had been facing a slump. However, the previous government led by KP Oli imposed the restriction again in mid-July, 2025.
The property transaction has been slowed in the past few years, which has been attributed to the slowdown in overall economic activities across the country. Speaking as a program on Tuesday, Finance Minister Rameshwore Khanal said that the income tax revenue has dropped by a notable amount due to decline in real estate and share transactions.
The third amendment talks about completing the land categorization in agriculture and non-agriculture groups by mid-July, 2026. The law will come into effect after it is published in the Nepal Gazette.
