Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects

Subash Ghimire

doi:doi:10.11648/j.ajce.20261402.18

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Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects

Subash Ghimire^*

Published in American Journal of Civil Engineering (Volume 14, Issue 2)

Received: 8 March 2026 Accepted: 18 March 2026 Published: 23 April 2026

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Abstract

Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.

Published in	American Journal of Civil Engineering (Volume 14, Issue 2)
DOI	10.11648/j.ajce.20261402.18
Page(s)	128-133
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2026. Published by Science Publishing Group

Keywords

Property Taxation, Institutional Constraints, Valuation, Reform

References

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[2]	Bird, R., & Slack, E. International handbook of land and property taxation. Edward Elgar. 2018. Available from: https://www.scirp.org/reference/referencespapers?referenceid=2192129 [Accessed 8 Feb 2026].
[3]	Kelly, R. making the property tax work. International Center for Public Policy Working Paper. 2013 Available from: https://ideas.repec.org/p/ays/ispwps/paper1311.html [Accessed 8 Feb 2026].
[4]	Oates, W. E. An Essay on Fiscal Federalism. Journal of Economic Literature. Harcourt Brace Jovanovich. 1972. Available from: https://fiscalfederalism.eu/wp-content/uploads/2020/05/ALLGEMEIN-Lit-1999-Oates-An-Essay-on-Fiscal-Federalism.pdf [Accessed 7 Feb 2026].
[5]	Government of Nepal. The Constitution of Nepal, 2015. Available from https://ag.gov.np/files/Constitution-of-Nepal_2072_Eng_www.moljpa.gov_.npDate-72_11_16.pdf [Accessed 7 Feb 2026].
[6]	Government of Nepal. Local Government Operation Act. 2017. Available from: https://mofaga.gov.np/news-notice/1697 [Accessed 7 Feb, 2026].
[7]	Government of Nepal. Intergovernmental Fiscal Arrangement Act. 2017 Available from: https://mof.gov.np/content/576/intergovernmental-fiscal-arrangement-act--2074--2017--english/ [Accessed 7 Feb 2026].
[8]	Karki, J. A study in revenue collection system in Nepal: 1846–1923.1982. Contributions to Nepalese Studies.
[9]	Karki, S. Contribution of house and land tax to total municipal revenue of Kathmandu Metropolitan City. 2018. Tribhuvan University.
[10]	Subedi, G., & Chhatkuli, R. R. Land policy issues in the Nepalese context. 2010. Journal on Geoinformatics, Nepal, 9(1), 28–33.
[11]	Koirala, N. R. Property taxation in Budhanilkantha Municipality, Nepal: An analysis on implementation for public services. 2024. Tribhuvan University.
[12]	Ghimire, S. Developing a land valuation model for land acquisition in infrastructure development. 2019. Kathmandu University.
[13]	Ghimire, S., Antonio, D., Kukkoknen, M., & Bhatta, G. P. Land and Property Valuation in Nepal. 2024. Available from: https://fig.net/resources/proceedings/fig_proceedings/nepal/ppt/ts02c/TS02C_ghimire_antonio_et_al_12889_ppt.pdf [Accessed 7 Feb 2026].
[14]	Sherpa, M. Structure and contribution of tax to the annual revenue of Bhaktapur Municipality. 2019. Tribhuvan University.
[15]	ATI. Leveraging digitalization to boost equitable property taxation. Available from: https://www.addistaxinitiative.net/news/leveraging-digitalisation-boost-equitable-property-taxation [Accessed 12 March, 2026].

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Ghimire, S. (2026). Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. American Journal of Civil Engineering, 14(2), 128-133. https://doi.org/10.11648/j.ajce.20261402.18

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Ghimire, S. Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. Am. J. Civ. Eng. 2026, 14(2), 128-133. doi: 10.11648/j.ajce.20261402.18

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AMA Style

Ghimire S. Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. Am J Civ Eng. 2026;14(2):128-133. doi: 10.11648/j.ajce.20261402.18

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@article{10.11648/j.ajce.20261402.18,
  author = {Subash Ghimire},
  title = {Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects},
  journal = {American Journal of Civil Engineering},
  volume = {14},
  number = {2},
  pages = {128-133},
  doi = {10.11648/j.ajce.20261402.18},
  url = {https://doi.org/10.11648/j.ajce.20261402.18},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajce.20261402.18},
  abstract = {Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.},
 year = {2026}
}

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TY  - JOUR
T1  - Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects
AU  - Subash Ghimire
Y1  - 2026/04/23
PY  - 2026
N1  - https://doi.org/10.11648/j.ajce.20261402.18
DO  - 10.11648/j.ajce.20261402.18
T2  - American Journal of Civil Engineering
JF  - American Journal of Civil Engineering
JO  - American Journal of Civil Engineering
SP  - 128
EP  - 133
PB  - Science Publishing Group
SN  - 2330-8737
UR  - https://doi.org/10.11648/j.ajce.20261402.18
AB  - Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.
VL  - 14
IS  - 2
ER  -

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Author Information

Subash Ghimire

Department of Geomatics Engineering, Kathmandu University, Dhulikhel, Nepal

Contact Email

http://orcid.org/0009-0004-3133-8693

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APA Style

Ghimire, S. (2026). Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. American Journal of Civil Engineering, 14(2), 128-133. https://doi.org/10.11648/j.ajce.20261402.18

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ACS Style

Ghimire, S. Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. Am. J. Civ. Eng. 2026, 14(2), 128-133. doi: 10.11648/j.ajce.20261402.18

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AMA Style

Ghimire S. Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects. Am J Civ Eng. 2026;14(2):128-133. doi: 10.11648/j.ajce.20261402.18

Copy | Download

@article{10.11648/j.ajce.20261402.18,
  author = {Subash Ghimire},
  title = {Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects},
  journal = {American Journal of Civil Engineering},
  volume = {14},
  number = {2},
  pages = {128-133},
  doi = {10.11648/j.ajce.20261402.18},
  url = {https://doi.org/10.11648/j.ajce.20261402.18},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajce.20261402.18},
  abstract = {Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.},
 year = {2026}
}

Copy | Download

TY  - JOUR
T1  - Property Taxation in Nepal: Institutional Constraints, Valuation Practices, and Reform Prospects
AU  - Subash Ghimire
Y1  - 2026/04/23
PY  - 2026
N1  - https://doi.org/10.11648/j.ajce.20261402.18
DO  - 10.11648/j.ajce.20261402.18
T2  - American Journal of Civil Engineering
JF  - American Journal of Civil Engineering
JO  - American Journal of Civil Engineering
SP  - 128
EP  - 133
PB  - Science Publishing Group
SN  - 2330-8737
UR  - https://doi.org/10.11648/j.ajce.20261402.18
AB  - Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.
VL  - 14
IS  - 2
ER  -

Copy | Download