BUTWAL, July 8 : Land and housing transaction in Rupandehi district was expected to increase this year with the designation of Butwal as temporary capital of Province 5. But such transactions have fallen this year, data of Land Revenue Office, Rupandehi, shows.
According to a data provided by the office, only 21,000 land registration certificates have been issued by the office in the current fiscal year so far. The office had issued 38,000 land registration certificates in Fiscal Year 2016/17.
Real estate entrepreneurs say that the new government directive on land plotting contributed to decline in land and housing transactions.
To check fragmentation of agricultural land which was growing at a fast pace, the government introduced a new directive from the first day of FY2017/18. As per the new rule, owners can create new plot from a piece of land only once a year. This affected land transaction in the district.
Knowledgeable sources also say creation of local governments as part of implementing federal system also affected land and housing transactions in the district. Investment in real estate sector started falling after people's representatives elected in local governments started saying that they would promote farming by discouraging land fragmentation. The other reason behind low land and housing transactions is the tightening of realty lending by bank and financial institutions.
LRO Rupandehi has mobilized Rs 1.29 billion in revenue from land and housing transactions in the current fiscal year (as of June 29). The total collection is Rs 2.1 million less than the same period of FY2016/17. LRO Rupandehi has three offices in Bhairahawa, Butwal and Majhgawa. According to the data, Butwal collected Rs 591.4 million in the current fiscal year, compared to Rs 827.7 million in the previous fiscal year. Similarly, Bhairahawa and Majhgawa offices have collected Rs 677.3 million and Rs 24.1 million, respectively.
Of the total revenue, Rs 744.5 million has been collected from registration fee which is 32.15 less than compared to the previous fiscal year. In FY2016/17, LRO Rupandehi had collected Rs 1.9 billion from registration fee. Similarly, Rs 430 million has been collected from capital gains tax.
“Collection of CGT has increased in the current fiscal year due to distribution of compensation to landowners by Gautam Buddha International Airport Project,” said Damodar Bhandari, an information officer with Bhairahawa Land Revenue Office, said.
The government is making it mandatory for real estate entrepreneurs to receive license from concerned agency. This is expected to affect land and housing transactions further. Similarly, the Supreme Court has also issued an order to implement Land Use Policy which will also hit such transactions.
Economist RC Acharya said that slowdown in real estate business may not be good in terms of revenue collection, but it is a good symbol for agricultural development. He also urged the government to implement Land Use Policy.
Although investment in real estate sector is declining, buying land for residential purpose is still on the rise. “Land plotting activities have declined to some extent. However, people are still buying land for residential and other purposes,” Ram Prasad Gyawali, an accounts officer with Butwal Land Revenue Office, told Republica.