Capital Gains Tax in Nepal — Property & Shares Guide

Whether you're selling ancestral land, a house in Kathmandu, or shares on NEPSE, the profit you make is subject to capital gains tax in Nepal under the Income Tax Act, 2058. The rate that applies, and how it gets collected, depends heavily on what you're selling and how long you've held it. This guide breaks down the current CGT rates for FY 2082/83 on both property and shares, the exemptions available, and how the tax is actually withheld at the point of transaction.

CGT Rate on Land / House Sale

For individuals selling land, a house, or house-land (treated as a non-business chargeable asset), the applicable rate depends on how long the property was held before sale. A holding period of more than 5 years qualifies for the long-term rate of 5 percent on the gain. A holding period of 5 years or less attracts the short-term rate of 7.5 percent on the gain. This structure is designed to reward longer-term ownership and discourage rapid speculative flipping of property.

CGT Rate on Listed Share Sales

Gains from selling shares listed on the Nepal Stock Exchange (NEPSE) follow a similar holding-period logic, but with different thresholds and rates. For individual investors, shares held for more than 365 days qualify for the long-term rate of 5 percent on the gain, while shares held for 365 days or less are taxed at the short-term rate of 7.5 percent. Institutional investors are taxed differently — a flat rate of 10 percent applies to all their capital gains on shares, regardless of how long the shares were held. The gain itself is generally computed using the weighted average cost of acquisition where multiple purchase lots are involved.

Exemptions

A few notable carve-outs reduce or eliminate CGT exposure in specific situations. Property sold for less than Rs. 10,00,000 is not classified as a chargeable non-business asset transaction at all, effectively exempting smaller-value property sales from CGT entirely. Inheritance itself is not a taxable event — CGT is not triggered simply because property or shares pass to an heir; tax only becomes relevant if and when the heir later sells the inherited asset, with the taxable gain generally computed against the asset's value at the time it was inherited rather than the original owner's historical purchase price. Beyond these two well-established points, some practitioners and IRD guidance reference additional relief in narrower situations, such as certain long-held primary residences or specific agricultural land categories — but the exact conditions and thresholds for these narrower exemptions can vary and are worth confirming directly with a tax professional or the concerned Land Revenue Office before relying on them for a specific transaction.

How CGT Is Withheld or Paid at the Point of Transaction

For property, CGT functions as an advance tax collected directly at the Land Revenue Office (Malpot) at the time the sale deed is registered — the seller cannot complete the registration without the applicable CGT being settled at that point, which means there is no separate, later CGT payment step for most individual property sales. For listed shares, the mechanism is entirely automated: when a sale order is executed, the broker and the Central Depository System and Clearinghouse (CDSC) compute the applicable gain and withhold the CGT before crediting the net sale proceeds to the seller's account. In both cases, the practical effect is the same — the tax is collected upfront, at source, rather than left to the seller to calculate and remit separately after the fact.

Filing Implications — Does CGT Need Separate Reporting?

Because CGT on both property and listed shares is collected at source — at the Land Revenue Office for property, and via the broker/CDSC for shares — most individual taxpayers do not need to separately compute and pay this tax again when filing their annual income tax return. That said, the transaction and the tax withheld should still be reflected in your financial records, and in certain circumstances — such as where the standard withholding doesn't fully capture the correct final liability, or where the taxpayer has additional related income or losses to offset — it may still be relevant to reference the transaction in the annual return. Retaining the CGT payment receipt from the Land Revenue Office, or the broker's contract note showing the CGT withheld, is good practice regardless.

FAQ

How much tax do I pay when selling land in Nepal?

It depends on how long you owned the property. If you held it for more than 5 years, you pay 5 percent capital gains tax on the profit (sale price minus cost and allowable expenses). If you held it for 5 years or less, the rate is 7.5 percent on the profit. If the total sale value is under Rs. 10,00,000, the transaction generally isn't classified as a chargeable capital asset sale at all, so no CGT applies. This tax is collected as advance tax directly at the Land Revenue Office when the sale deed is registered.

Is capital gains tax different for non-resident Nepalis (NRNs) selling property?

Non-resident individuals are generally treated differently from resident taxpayers for tax purposes, and property sales by non-residents often do not receive the same long-term holding benefit available to residents. Given the added complexity of NRN status, cross-border considerations, and property ownership rules under the NRN Act, it's especially important for NRNs to confirm their specific CGT treatment with a tax professional before a sale.