Real Estate Transaction Tax Update in Nepal: The Ultimate Guide for FY 2083/84 (Budget 2083)

If you are planning to buy or sell land or a building in Nepal, the financial landscape has just shifted significantly. The government has rolled out major tax updates under the FY 2083/84 (Budget 2083) framework, directly altering the costs of property transfers for both buyers and sellers.

Capital Gains Tax (CGT) rates have increased across the board, while new, distinct registration incentives have been formally clarified for first time homebuyers.

1. Capital Gain Tax (CGT) Update \What Sellers Pay

Capital Gains Tax is charged strictly on the net profit (gain) generated from selling land or buildings (classified as non business assets). If you are a seller, your tax burden depends entirely on your holding period, and the rates have seen a noticeable bump compared to the previous fiscal year (up to FY 2082/83):

New CGT Rate Breakdown

• Holding Period: More than 5 Years (Long Term)
  • Previous Rate: 5%
  • New Rate (FY 2083/84): 7.5%
• Holding Period: Less than 5 Years (Short Term)
  • Previous Rate: 7.5%
  • New Rate (FY 2083/84): 10%

Important CGT Legal Adjustments

• Final Tax Status: For natural persons, CGT on land and buildings is now officially a final tax. This means you no longer need to file it in your annual income tax return.
• CGT Relief for Development Projects: To support infrastructure, no capital gain tax will be imposed on the amount up to the government assessed valuation (Malpot value) used for registration when land is acquired specifically for development projects.

Real World CGT Calculation Example

Imagine you bought a piece of land for NPR 1 crore  and sold it for NPR 1.5 crore netting a clear profit (Capital Gain) of NPR 50 lakhs :

• If held for more than 5 years: Your tax increases from the old rate of NPR 2 crore 50 lakh  (5%) to the new rate of NPR 3 lakh 75 thousand (7.5%).
• If held for less than 5 years: Your tax increases from the old rate of NPR 3 lakh 75 thousand (7.5%) to the new rate of NPR 5 lakhs (10%).

2. Who Pays What? Other Real Estate Taxes & Charges

When closing a deal, it is vital to know which expenses fall on the buyer and which fall on the seller:

• Registration Fee : Paid by the Buyer at the time of property registration.
• Local Transfer Tax : Paid by the Buyer. Imposed directly by the local government during the transfer process.
• Stamp Duty & Admin Charges: Paid by the Buyer. This includes stamp duty, document verification fees, service charges, and registration processing fees.
• Malpot / Land Revenue Clearance : Paid by the Seller. All outstanding land revenue dues must be fully cleared before the property can be transferred.
• Capital Gains Tax (CGT) : Paid by the Seller on the transaction profits.

3. New Registration Fee Rates (By Local Level)

The applicable registration fee rate is calculated based on the declared value of the property. Notably, the FY 2083/84 budget maintains a discounted tier specifically to support First Home Buyers :

Type of Local Level | General Rate (Buyer Pays) | First Home Buyer Rate Metropolitan City  | 5% | 4%
Sub Metropolitan City  | 4.5% | 3.5%
Municipality  | 4% | 3%
Rural Municipality  | 2% | 1.5%

4. What a 1 Crore Deal Looks Like Now 

To put this into perspective, let's look at the complete estimated tax breakdown for a standard property transaction valued at NPR 1 crore with a seller profit of NPR 2 crore :

What the Buyer May Pay:

• Registration Fee (4% - 5%): NPR 4 lakh – NPR 5 lakh
• Local Transfer Tax (Up to 2%): Up to NPR 2 lakh
• Stamp & Admin Charges: NPR 10 lakh  – NPR 30 lakh
• Total Estimated Buyer Cost: NPR 4 lakh 10 thousand – NPR 7 lakh 30 thousand

What the Seller May Pay:

• Capital Gain Tax (on NPR 20 crore profit):
  • If held > 5 years (7.5%): NPR 1 lakh 50 thousand
  • If held < 5 years (10%): NPR 2 lakh
• Land Revenue Dues: Any remaining balance (if applicable).

 Ever since Budget 2083 rolled out, we've had many clients asking if they can save on costs. If this is your very first time buying a home, make sure you bring your official government employee or first time buyer paperwork to claim your tax discount. 

Key Points for Property Investors in 2026

According to the government, it expects significantly higher revenue from the real estate sector this fiscal year.

For individual players, a higher CGT structure means sellers face increased tax costs across the board. Short term buying and selling has become much more expensive at a 10% tax rate, while long term holders are not entirely spared, seeing their rate jump to 7.5%.

Before heading to the Malpot office, keep these critical notes in mind:

1. These rates can vary slightly depending on your specific province, local government rules, and property classification.
2. Always check and verify the absolute latest sub rates with your local government office immediately prior to a transaction.
3. Keep all tax payment receipts and official documents structurally safe for seamless future reference.