If you sell land, a house, or an apartment in Nepal and make a profit, you owe capital gains tax on that profit. As of the 2083/84 fiscal year (2026/27), a resident individual pays 7.5 percent on the gain if the property was held for more than five years. If it was held for five years or less, the rate is 10 percent.
The tax is charged on your gain, not the full sale price. Gain means the sale value minus what you originally paid and minus certain documented costs. The Land Revenue Office (Malpot) collects it at the moment you register the transfer, so nothing reaches your bank account until it is paid.
That is the short answer. The rest of this guide explains how the number is calculated, what you can subtract, who is exempt, and where sellers commonly get it wrong. Rates and rules change with each year’s budget, so treat the figures here as accurate for 2026 and confirm the current rate at your local Malpot office before you sign.
Capital Gains Tax on Property in Nepal (2026)
- Held more than 5 years: 7.5 percent on the gain (resident individual).
- Held 5 years or less: 10 percent on the gain (resident individual).
- Tax base: Sale price minus purchase price minus allowable expenses.
- Value used: the higher of your deed price and the government (Malpot) valuation.
- Companies and registered firms: 1.5 percent of the sale value at Malpot, then reconciled in the corporate return.
- Collected by the Land Revenue Office at registration. For individuals, this is the final tax, with no separate filing.
- Transaction value below Rs 10 lakh is generally exempt.
These 7.5 and 10 percent rates took effect on Shrawan 1, 2083 (about 16 July 2026) under the Finance Act for FY 2083/84. Before that, through FY 2082/83, the rates were 5 percent (long-term) and 7.5 percent (short-term). Sales completed in Ashadh 2083, just before the new year, used the older figures.
What is Capital Gains Tax on property?
Capital gains tax, often shortened to CGT, is a tax on profit. When you buy a plot in Tokha for Rs 48 lakh and sell it years later for Rs 56 lakh, the Rs 8 lakh difference is your capital gain (before deductions). The tax applies to that gain.
It does not apply to the whole Rs 56 lakh. This is the single biggest source of confusion, and even some bank explainers get it wrong by multiplying the rate against the full deed value. If you ever see a CGT estimate that looks huge, check whether someone taxed the sale price instead of the gain.
CGT in Nepal is governed by the Income Tax Act 2058 and administered by the Inland Revenue Department (IRD). The rates you actually pay, though, come from the annual Finance Act, which overrides the older statutory numbers each year.
What are the current CGT rates on property in Nepal?
For a resident individual (a “natural person” in tax language) selling land or a building, there are two rates based on how long you owned the property.
| Holding period | CGT rate (FY 2083/84) | Previous rate (through FY 2082/83) |
|---|---|---|
| More than 5 years | 7.5 percent on the gain | 5 percent |
| 5 years or less | 10 percent on the gain | 7.5 percent |
The upward revision came in the FY 2083/84 budget presented by Finance Minister Swarnim Wagle in late May 2026, and it applies to transfers from Shrawan 1, 2083, onward. Financial outlets including Investopaper reported the change, with property held over five years moving from 5 to 7.5 percent and property held under five years moving to 10 percent. The same budget also cut the CGT rate on government compulsory land acquisition to 2.5 percent.
A note on companies. If the seller is a company or a registered firm rather than an individual, the Land Revenue Office collects 1.5 percent of the sale value at transfer. The firm then settles the balance in its corporate tax return, where real estate gains fall under the normal corporate rate.
One more wrinkle worth flagging. A few property websites have published a valuation-bracket version of the new rules, where the CGT rate steps up with the size of the transaction (for example, higher rates on deals above Rs 5 crore). Most mainstream financial coverage describes the simpler two-tier structure above, so if your deal is large or unusual, do not rely on a blog table. Ask the Malpot office to run the calculation and show you the rate they apply.
How to Calculate Capital Gains Tax on Property?
The formula is straightforward once you separate the pieces.
Capital gain = Sale price − Purchase price − Allowable expenses
Then apply the rate (7.5 or 10 percent) to that gain.
The sale price used is not always the price on your deed. The office uses the higher of the actual deed value and the government minimum valuation for that area. If you write a deed price below the published Malpot rate, the office substitutes its own higher figure. So under-declaring rarely helps, and it can hurt, as explained later.
What you can subtract from the gain?
Three broad categories of cost reduce your taxable gain, according to bank guidance such as Global IME Bank’s explainer:
- The original purchase price, backed by your registered deed.
- The registration cost you paid when you first bought the property. That earlier fee is added to your base.
- Documented improvements. This includes legal fees, broker commission on the purchase, and the cost of construction or renovation, all supported by receipts.
The word to underline is documented. If you paid cash for a new roof in 2015 and kept no bill, you cannot deduct it in 2026. Self-built houses are the classic trap. Owners who put up their own home over several years rarely keep receipts. At sale time they cannot prove the construction cost, so they end up with a larger taxable gain than they should have.
A worked example
Say you bought a 4 aana plot in Tokha in 2017 for Rs 12 lakh per aana. That is Rs 48 lakh. You paid roughly Rs 2.3 lakh in registration costs at the time, so your base becomes about Rs 50.3 lakh.
You sell in 2026 for Rs 14 lakh per aana, or Rs 56 lakh. Your gain is Rs 56 lakh minus Rs 50.3 lakh, which is Rs 5.7 lakh. You held the plot for nine years, so the long-term rate of 7.5 percent applies.
CGT = 7.5 percent of Rs 5.7 lakh = Rs 42,750.
The Malpot office withholds that amount before clearing the transfer. Nothing else is owed.
Now compare a short-term sale. Suppose you bought an apartment in late 2023 for Rs 1.2 crore and sold it in 2026 for Rs 1.5 crore, with no documented improvements. Your gain is Rs 30 lakh. Because you held it under five years, the rate is 10 percent, so CGT is Rs 3 lakh. If you can document a broker commission and legal fees on the purchase side, those come off the gain first and lower the bill.
Who collects the tax, and do you have to file separately?
The Land Revenue Office collects CGT at the point of transfer under Section 95A of the Income Tax Act. You sign over the deed, the office works out the gain, and withholds the rate and only then completes the registration.
For a resident individual, that withholding is the end of the story. The Inland Revenue Department has confirmed in writing that CGT paid at registration is treated as the final tax on real estate income for natural persons. There is no separate annual return, no reconciliation, and no surprise notice months later, as long as the Malpot calculation was done correctly. Companies are the exception and do reconcile in their corporate return.
What is Exempt from property CGT in Nepal?
A few situations reduce or remove the tax.
Transactions below Rs 10 lakh. CGT on land or a house generally does not apply where the transaction value is under Rs 10 lakh. A small plot in a remote area selling for Rs 6 lakh carries no CGT.
Long-held, low-value homes. A property held for 10 years or more and sold for up to Rs 10 lakh is treated as exempt. This is the closest thing Nepal has to a primary-residence break. Above the Rs 10 lakh ceiling, the standard long-term rate applies regardless of how long you owned the home.
Inheritance and family transfers. Passing property down the family line through inheritance is not taxed at the moment of transfer. When the heir later sells to an outside buyer, CGT applies, but the base cost is reset to the market value on the date of inheritance, not the ancestor’s original purchase price. Take a plot inherited in 2018 at a Rs 60 lakh valuation and sold in 2026 at Rs 90 lakh. The taxable gain is Rs 30 lakh, not the much larger gain you would get measuring back to a 1970s cost.
Government compulsory acquisition. When the government acquires land for a project, the FY 2083/84 budget set a reduced CGT rate of 2.5 percent.
Is there a Women’s Discount on capital gains tax?
Not on CGT itself. This is a common mix-up worth clearing up.
Nepal does offer a real concession to women, but it applies to the registration fee that a buyer pays, not to the seller’s capital gains tax. Women buyers get a discount on registration charges, reported at around 25 percent in urban areas and 30 percent in rural municipalities, with a further reduction for single women. That is one reason many family properties in the Kathmandu Valley are registered in a wife’s name.
So if someone tells you a woman selling land pays less CGT, that is not how the rule works. The saving sits on the buying side, in the registration fee. You can read the full breakdown in our guide to registration fees for buying and selling property in Nepal.
CGT versus Registration Fee: Do not confuse the two
These are two different taxes on opposite sides of the same deal.
CGT is paid by the seller on the gain. The registration fee (rajistreshan dastur) is paid by the buyer on the declared value of the property. They are calculated from the same deed but flow in opposite directions. A seller worrying about the registration fee, or a buyer worrying about CGT, is usually confused about which side they are on.
Inside the Kathmandu Valley, buyer registration fees run roughly 3 to 5.3 percent of declared value, depending on the municipality, plus surcharges. Apartments are taxed at a lower flat rate. Because the exact figure depends on location and property type, check the current schedule rather than guessing.
Why under-declaring the price usually backfires?
Some sellers ask the buyer to record a lower price on the deed, hoping a smaller sale value means a smaller gain and a smaller CGT bill. Two reasons this rarely works.
First, the office uses the government minimum valuation when the deed price falls below it. Your gain gets recalculated off the MALPOT rate, so the “saving” disappears.
Second, you push a problem onto the buyer. Their base cost is now artificially low. When they eventually resell, their gain is bigger by exactly the amount that was under-declared, and their CGT is higher. You have not removed the tax; you have shifted it and added risk.
Enforcement is real. In a well-known 2017 case, a New Road plot was registered far below its true value; the land authorities took it to court, and the tax was recovered on the actual price. The clean move is to declare the real number. If a counterparty is pushing hard to under-declare, treat it as a warning sign about the rest of the paperwork.
How to keep your CGT bill accurate?
The most expensive mistake in Nepali property tax is not the rate. It is lost documentation.
From the day you buy, keep every relevant record in one place: the registered deed, the registration fee receipt, stamp duty, broker commission, legal fees, and any construction or renovation bills. Years later, that pile is your defensible base cost. Sellers routinely forget Rs 4 to 5 lakh of legitimate additions to base simply because they never kept the receipts, and they overpay as a result.
If you are buying with a loan, remember that several one-time charges are part of your true cost. Our post on additional home loan charges you don’t know about walks through the fees that catch first-time buyers. And if you are calculating per aana or per ropani values, the Nepal land unit converter keeps your area math clean.
Frequently asked questions
What is the capital gains tax rate on property in Nepal in 2026?
For a resident individual, CGT is 7.5 percent on the gain if the property was held for more than five years and 10 percent if held for five years or less. These rates apply from Shrawan 1, 2083 (about 16 July 2026) under the FY 2083/84 budget. Before that, the rates were 5 and 7.5 percent. Companies pay 1.5 percent of the sale value at the Land Revenue Office and reconcile separately.
Is CGT charged on the sale price or only on the profit?
Only on the profit. Gain equals sale price minus purchase price minus allowable expenses such as the original registration cost, broker commission, legal fees, and documented improvements. The value used is the higher of your deed price and the government valuation for the area.
Do I need to file a separate tax return for property CGT?
For a resident individual, no. The Land Revenue Office withholds the tax at registration, and the IRD treats that as the final tax on the gain. Companies and registered firms do reconcile the amount in their corporate return.
Is inherited property taxed when I sell it?
Yes, but the base cost is reset to the market value on the date you inherited it, not the original owner’s purchase price. The inheritance transfer itself is exempt. Only your later sale to a third party is taxed.
Do women pay less capital gains tax when selling property?
No. The women’s concession in Nepal is a discount on the buyer’s registration fee, not on the seller’s CGT. It reduces the cost of purchasing, not the tax on selling.
When is a property sale exempt from CGT?
Transactions below Rs 10 lakh are generally exempt, and a home held for 10 years or more and sold for up to Rs 10 lakh is treated as exempt. Family-line inheritance transfers are also exempt at the point of transfer.
Before you sell
Work out your gain before you go to the Malpot office, not after. Pull together your original deed, your registration receipt, and every improvement bill you can find, then apply the right rate for your holding period. If the numbers are large or your situation is unusual, spend an hour with a tax advisor. The fee is small next to the cost of overpaying because a receipt went missing.
When you are ready to move, you can list your land or house or browse verified listings on Basobaas to see what similar properties are fetching in your area. Knowing the going rate helps you price the sale and estimate your gain with confidence.
This guide reflects rules and rates as understood in 2026. Tax rates change with each year’s budget, and individual cases vary. Confirm the current figures with your local Land Revenue Office or a qualified tax advisor before completing a transaction.
