Government Denies Real Estate Slowdown, Official Valuations Increase in Kathmandu

The real estate sector has been sluggish for the past few years, with prices declining and sales slowing down. Businesspeople involved in property transactions claim that land and house prices have dropped by around 30% during this period. Independent valuers estimate the decline to be between 30% and 50%. However, the government has not acknowledged this downturn. Instead, official property valuations for transactions have increased.

Official Valuations Rise Despite Market Decline

The government has raised the valuation rates for property transactions, particularly for registration purposes. However, property tax assessments have remained stable this year. Currently, land valuations are determined in two ways: by district administration offices and local governments.

A committee led by the Chief District Officer, including representatives from survey offices, tax offices, and land revenue offices, sets minimum land values. These adjusted rates apply for the current fiscal year.

Valuation Process and Authorities

There are 135 land revenue offices nationwide, with nine in the Kathmandu Valley—six in Kathmandu, two in Lalitpur, and one in Bhaktapur. These offices follow valuations set by the respective administrations.

Local governments assess property values for tax purposes, a responsibility granted by the constitution. However, land revenue offices primarily rely on district administration valuations, with some exceptions.

Transaction Rules and Price Stability

Once a property is sold at a certain price, future transactions cannot be registered below that rate. For example, if land was previously sold at NPR 1 million per aana, a later sale at NPR 500,000 per aana would not be accepted. Authorities use three reference points to determine fair valuations.

Most Expensive and Cheapest Land in the Valley

This year, the highest government valuation in Kathmandu is NPR 7.26 million per aana in prime areas like Hanuman Dhoka, New Road, Dharahara, and Singha Durbar. Other key locations have valuations between NPR 3.8 million and NPR 5.7 million per aana.

In Lalitpur, the highest valuation is NPR 3.95 million per aana in Kupondole and Jawalakhel. Bhaktapur’s highest valuation is NPR 3.5 million per aana along the Arniko Highway.

Meanwhile, the cheapest land is in rural areas with unpaved roads. In some parts of Lalitpur, valuations are as low as NPR 420,000 per ropani. Similarly, Kathmandu’s Sangla area has land valued at NPR 363,000 to NPR 440,000 per aana.

Price Increases in Selected Areas

Some locations have seen valuation increases this year. In Tokha, prices rose by about 10%, while Harisiddhi (Lalitpur) saw a 20% hike. Bhaktapur selectively increased rates, with the Arniko Highway area seeing a rise from NPR 3.35 million to NPR 3.5 million per aana.

Despite market declines, official valuations continue to rise in certain areas, creating a mismatch between actual market prices and government assessments.