Owning a property comes with many responsibilities and taxation is one among them. Your property could be your land, an office, shop, building, house, etc. If we look into the History of property taxation in Nepal, the first elected government introduced this tax under the finance act 1959. It was implemented under the property tax act in 1960. Due to ineffectiveness in collecting revenue. It was replaced by an urban house and land tax later. Urban house and land tax were introduced in 1962 for collecting Revenue from the urban house and land property. Initially, Bhaktapur, Biratnagar, Birgunj, Nepalgunj, Rajbiraj, Janakpur, and Butwal in 1963/64 and Bhairawa, Pokhara, Palpa and Hetauda in 1973/74. However, it was been again replaced by an urban house and land tax in 1995/96

Tax is classified into two groups i.e direct and indirect tax. Property tax falls under the category of direct tax in which tax is collected by the nation from the concerned individual.

According to the data of Land Tax Rules, 2020 published by the law commission of the government of Nepal, there are the following processes in the tax implementation;

First, the committee does the valuation of house and land of the urban area by inspecting various places and on the basis of the principles set down by the government of Nepal and submit it to the Government of Nepal, Ministry of Finance through the Department of Tax. The valuation is based on the area your property is rural or urban, and the facility accessible and available such as electricity, the distance between school, banks, and other daily basis services.

After the valuation, the taxpayer consults with a tax officer who evaluates and assesses the figure of the tax as per that valuation. The Tax assessment order has to indicate a brief description of how the tax has been assessed.

In evaluating the house and land of any person under Section 7 of the Act and assessing the house and land tax thereon, the Tax Officer has to take into consideration the following matters:
(a) The secret report, if any, made by the tax inspector or anyone else,
(b) Survey maps or deed of public inquiry of such house and land received from the tax inspector or anyone else,
(c) Any other such basis as may be considered appropriate by the Tax Officer

In case, where the Tax Officer has imposed a penalty and fine on any person under the Act, he/she has to give a time-limit of Thirty-Five days to recover the amount of penalty and fine from such person; and in cases where no receipt of payment of the amount is not received even within that time-limit, the Revenue Office or the authority prescribed by Government of Nepal shall upon a notice given by the Tax Officer recover such amount by confiscating, if necessary, the property of such taxpayer in accordance with the procedures mentioned in the prevailing Nepal law

In a nutshell, when the urban house and land tax is levied on the value of the property, depreciation is also taken into account, at rates ranging from 0.05% to 1.50% per year, depending on the type of construction of the house. According to the fiscal bill 2077/78, you have to pay 0.01 percent tax on a house or land or any other property worth Rs. 1 crore. The tax is paid to the metropolis. For metropolises, the property tax is one of the most reliable sources. Similarly, if you have property worth more than Rs. 10 crores, you have to pay tax 0.60% of the value. Due to the COVID-19 pandemic, a 10 percent exemption in property tax has been decided by the government and the tax will have to file by the end of push month 2077. The exemption is valid until COVID-19 crisis settles and will no longer be available after the solution of the crisis is found in the foreseeable future.