KATHMANDU, April 9: Despite a noticeable slowdown in Nepal’s real estate market, land revenue collection rose by nearly 14 percent in the first seven months of the current fiscal year, according to government data.
Property transactions have slowed significantly, affecting turnover in the sector and putting pressure on government revenue. Still, figures from the Department of Land Management and Archive (DoLMA) show a moderate year-on-year rise in collections.
In the month of Magh (mid-January to mid-February), the government collected Rs 3.872 billion in land revenue, a drop from Rs 4.25 billion in Poush (mid-December to mid-January). Revenue collection in Mangsir (mid-November to mid-December) stood at Rs 3.874 billion.
Despite monthly fluctuations, total land revenue in the first seven months of the current fiscal year (2023/24) reached Rs 24.71 billion, up from Rs 21.65 billion in the same period last fiscal year.
Real estate business marginally increases, Govt raises Rs 3 bil...
According to Bishnu Prasad Ghimire, Chairman of the Nepal Land and Housing Developers' Association (NLHAD), government inaction is largely to blame for the stagnation.
He pointed out that halting the land demarcation process has caused instability, with several municipalities still failing to carry out proper land classification. “Uncertainty continues to grip the sector,” he said.
Ghimire also criticized banks and financial institutions for raising interest rates on real estate loans without justification, creating further pressure. He said the Nepal Rastra Bank has failed to revise its policies in ways that support the sector. “Although monetary policies are announced every quarter, they rarely address the concerns of the real estate market,” he noted.
He further blamed the Kathmandu Valley Development Authority (KVDA) for blocking land transactions and preventing demarcation. “The KVDA has kept land frozen under the Smart City project for over a decade. There have been no roads or infrastructure built, and local communities have suffered for 12 to 14 years,” Ghimire said.
He added that the land-related ordinance introduced by the government could have offered some relief, but political disputes rendered it ineffective.
“Real estate entrepreneurs weren’t entirely satisfied with the ordinance, but at least some restrictions were clarified—such as the 25-ropani ceiling for land development in the Kathmandu Valley and an 11-bigha limit for land demarcation in the Terai,” he said.
Although the ordinance proposed broader provisions to enable the development of new towns and cities, opposition parties strongly objected and politicized the issue, Ghimire claimed.
He also mentioned the government’s land bank concept, which aims to identify and utilize unused land for productive purposes. “It’s a great idea, but the government has been slow to implement it. Proper use of barren land through the land bank could boost national production,” he said.
To revive the real estate sector, Ghimire emphasized the need for policy stability and public trust. “Banks have ample liquidity, but people are not in a position to take loans. Restoring confidence is essential,” he said.