Real estate transactions decline affecting govt revenue

KATHMANDU: Real estate transactions in Nepal have declined in Magh (mid-January to mid-February) compared to Poush (mid-December to mid-January), leading to a decrease in government revenue.

While transactions had increased in Poush compared to Mangsir, the latest figures indicate a slowdown in the sector.

According to the Department of Land Management and Records, a total of 43,140 real estate deeds were processed across the country in Magh, whereas 48,156 transactions were recorded in Poush.

Morang district saw the highest number of transactions in Magh, with 2,816 real estate deals completed through its three Land Revenue Offices. In contrast, Manang and Mustang districts had the lowest number of transactions, with only five each.

The Land Reforms and Land Revenue Office in Inaruwa, Sunsari, recorded the highest number of transactions in a single office, with 1,704 transactions. Meanwhile, some offices, including those in Banganga, Bodgaun, and Kapilvastu, did not record a single transaction.

The decline in real estate transactions has also impacted government revenue. In Magh, the government earned Rs 1.45 billion in capital gains tax from real estate transactions, which is almost Rs 150 million lower than the amount collected in Poush.

The total revenue generated from real estate transactions in Magh amounted to Rs 3.87 billion. In comparison, the government had earned Rs 4.25 billion in revenue from real estate transactions in Poush, along with Rs 1.60 billion in capital gains tax.

Throughout the current fiscal year, government earnings from capital gains tax on real estate transactions have fluctuated. In Shrawan, the revenue was Rs 1.34 billion, which decreased to Rs 1.13 billion in Bhadra. The collection stood at Rs 1.11 billion in Asoj, Rs 93 billion in Kartik, and Rs 1.31 billion in Mangsir.

The continuous decline in transactions and revenue suggests growing concerns within the real estate sector. Market uncertainty, economic conditions, and potential policy changes are seen as key factors affecting its performance.