Annual land and house tax in Nepal: malpot vs municipal property tax

You buy a flat in Kathmandu, hand over a painful 5%-plus of the price in registration tax at the Malpot office, and assume the tax chapter is closed. Then a year later a ward notice or an SMS arrives asking for "property tax," and the obvious thought is: did I not already pay tax on this?

You did, but that was a different tax. Owning land and a house in Nepal carries two small annual bills that have nothing to do with the one-time tax you paid at purchase. Both are modest. Both are easy to ignore until the day you try to sell.

Three taxes people mix up

Most of the confusion is that all three are handled at or around the Malpot office. Separate them and the rest is simple.

The first one, the registration stack, is the expensive event covered in the property registration costs post. This post is about the two recurring lines.

Malpot: the land revenue that keeps your records alive

Malpot, or land revenue (भू-कर), is the oldest of the three. It runs under the Land Revenue Act 2034 and is assessed at the Land Revenue Office by traditional land category, the Abal, Doyam, Sim, and Chahar grades, with a separate urban land tax for city plots. The rupee figure is genuinely small and varies by land class and locality, so there is no single national rate to quote.

What makes it matter is not the amount but the receipt. The annual तिरो (tiro) voucher is proof the land revenue is paid, and it is a required document to register, transfer, or mortgage the land. Let it lapse for years and the plot is effectively frozen for any transaction until you clear the back dues and penalty. The land-buying checklist treats a clean malpot trail as one of the things to verify before you pay bayana, precisely because a seller's unpaid revenue becomes the buyer's delay. Land freeze and release (रोक्का and फुकुवा) are moving online as of 2026, part of a broader digitisation of Malpot services.

Integrated Property Tax: the municipal bill on your house

IPT is the newer, post-federalism tax. The Local Government Operation Act 2074, in force since October 2017 under the Constitution's grant of local taxing powers, empowers every municipality and rural municipality to levy integrated property tax (एकीकृत सम्पत्ति कर) or a house-and-land tax. From Shrawan 2075 onward, the local units that adopted IPT folded the old separate house tax and land tax into one charge on the building plus the land beneath it, with only land up to twice the building's plinth area counted as property; excess vacant land is taxed as land instead.

Each local government sets its own slabs through its annual finance act, so the rate is local, not national. Kathmandu Metropolitan City's Economic Act sets a marginal slab scale, where each band's rate applies only to the value that falls inside it, not one flat percentage on the whole property:

The rates are deliberately tiny at the bottom: a Rs 1 crore home owes only about Rs 1,000 a year. KMC adopted this structure when it moved to IPT in 2018, and the latest rate sheet published on its portal is the FY 2080/81 Economic Act, so confirm the current year's figure at your ward. What KMC actually changed recently was the valuation, not these percentages. After taxpayer pushback it rolled assessed values back to older, lower Malpot figures, so the same scale now applies to a smaller base. Online Khabar reported KMC's property-tax take in the first four months of FY 2081/82 at Rs 42.76 crore, down from Rs 50.31 crore a year earlier, the drop attributed to charging on the lower valuations and refunding people who had been overbilled. The taxable value comes from the District Land Valuation Committee rate, the gazetted minimum valuation set annually, with buildings valued on construction cost minus depreciation.

Deadline, rebate, and the late-payment penalty

Both taxes are paid within the fiscal year, Shrawan to Asar. The exact incentives sit in each municipality's finance act. KMC, for one, gives a 10% rebate for paying property tax by its early-payment cut-off (end of Poush in the FY 2080/81 act, though the date is set fresh each year). Late payment draws a fine, but KMC's act leaves the exact percentage to separate rules rather than fixing it, so the safe move is to ask your ward what this year's rebate window and penalty are rather than assume a national figure.

Paying is easier than it used to be. In Kathmandu you register on the KMC taxpayer e-service portal at eservice.kathmandu.gov.np and pay property, house-rent, and business tax through the Khalti app. Many other local governments run the Sutra Revenue app for the same job. You will generally need your citizenship, the lalpurja, and the previous year's receipt; for IPT, some wards also want the building permit and a sketch.

The house-rent tax confusion

One more term gets dragged in: house-rent tax. If you rent property out, your municipality levies a house-rent tax (घरबहाल कर), commonly 10% of annual rent, collected by the local government, not the IRD. Confusingly, the national income tax on house rent separately applies a 10% TDS on rent that does go to the IRD. Neither is the same as IPT, which taxes ownership rather than rental income. If you are a landlord, you can face the municipal rent tax and the national one; if you simply own and live in your home, only malpot and IPT apply. Whether to rent or own in the first place is the renting vs buying question, and the gain when you eventually sell is the property capital gains tax.

What you actually need to know

• The annual taxes are not the registration tax. You paid 5%-plus once at purchase; malpot and IPT are small recurring bills, not a repeat of that.
• Malpot is about access, not amount. The yearly land-revenue receipt is cheap, but without it you cannot sell, transfer, or mortgage the plot.
• IPT is local and modest. A fraction of one percent of assessed value, set by your own municipality, with a rebate for paying early and interest for paying late. Confirm this year's slab at the ward.

Confused about which of these you actually owe on a specific plot or flat, or sitting on years of unpaid malpot before a sale? Email parjanya57@gmail.com.

This post is part of the Nepal Money Basics guide — the big-ticket decisions section.