As described in Wikipedia, Capital Gains Tax (CGT) is a tax on capital gain, the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale. The most common capital gains are realized from the sale of stocks, bonds, precious metal, or property. In Nepali, we call it Labhaansh Kar (लाभांश कर). Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations.
In a simpler phrase, Capital Gains are the profits that an investor realizes when he or she sells the capital asset for a price that is higher than the purchase price. Capital Gains taxes are only triggered when an asset is realized, not while it is held by an investor. An investor can own shares that appreciate every year, but the investor does not incur a capital gains tax on the shares until they are sold.
Formula: Sale Price – Purchase Price = Capital Gains Amount
Note: This formula assumes the sale price is higher than the purchase price. If an investor sells an asset for less than he or she paid, this is called a capital loss, and no tax is owed.
If the land and building is owned for a period less than 5 years – 5%
If the if the land and building is owned for a period more than 5 years – 2.5%
(If the building is owned and resided for a period more than 10yrs., it does not fall within the definition of Non-Business Chargeable Assets hence, It’s not taxable.)
Mr. Ram purchased a house for Rs Fifty lakhs on 2070/01/01.
He sold the same house on 2074/01/01 for Rs Seventy lakhs.
Capital Gains tax on such house shall be calculated as per below:
Sale Price – Purchase Price = Capital Gains Amount
70,00,000 – 50,00,000 =20,00,000
Since the house was owned for less than five years, capital gains tax @ 5% Rate on such gain amounting Rs. 1,00,000 (5/100 * Capital Gains Amount) should be deducted by land registration office. This is the advance tax and Mr. Ram should adjust this with the total tax liability by submitting the income tax return.
Note: If the house was owned by Mr. Ram for more than 10 years and stayed in there for continuously or intermittently, then it would not be categorized as a non-business chargeable asset and capital gains tax would not be levied.
If the house was owned for more than 5 years and came under the definition of non-business chargeable assets than the capital gains tax would have been levied @ 2.5% Rate which will be Rs. 50,000 (2.5/100 * Capital Gains Amount).
To know more about capital gains tax, Visit Inland Revenue Department website
Real Estate in Nepal has been one of the main sector absorbing a large chunk of bank lending. We all know, it is also one of the fastest and easily scalable business in Nepal’s scenario. Demand and supply of house, land, apartment in urban Nepal has brought this new industry into its existence and that is online property buying and selling market. As a number of people are migrating to metro cities and global brands and organisation being established in Nepal, the demand of Real Estate is growing higher. To meet up with clients’ tailored requirement, online portal is a technological gift.
Online portal works in a favor of both parties- Buyers and Sellers. It is serviceable to a mediator as well as people working as a Middle Man in this industry on a commission basis. Following are five Real Estate companies serving their customers/clients and doing Online Real Estate business in Nepal.
Hamrobazaar.com is a FREE online classified portal which enables individuals as well as companies to list a wide variety of new or used product via internet. Hamrobazar believes that Internet is an effective promotional vehicle as well as a communication channel that connect buyers and sellers. Hamrobazar helps to list your products for free.
Currently, there are 6132 properties including land, house and apartment listed in hamrobazaar online portal.
Lucky Group, a business house with a varied interest in manufacturing, trading and service sector since 1980, seeks to establish a strong presence in the realty sector. The Realtors was built to create highly engaging, personalized web experiences for customers with evolving needs whilst on the site.
1 Ropani is another online Real Estate business portal that aims to provide service to growing Real Estate need of Nepal. Following are their four services and few unique selling point:
GharBazaar is an online marketplace for those who want to make a deal in their properties directly with the seller and buyer. Moreover, it is a bridge between buyer and seller. You can start promoting your property as a free listing or you can choose a premium service with a nominal fee. Your property will be displayed in a featured list (HomePage).
Housing Nepal aims to become a one-stop destination for anyone seeking information on Nepalese Real Estate and related professionals. The purpose is to provide an open hub for property seekers and sellers using ICT (Information and Communication Technology) to engage in dialogue that may help facilitate the best Real Estate deals for prospective clients.
The online portal is a blessing to someone who is new to a city, someone who doesn’t have contact with a local broker or have any friends or family living around in a new city. It saves your time and money. Having said that, the way companies are mushrooming in the name of real estate agency and business house, the only ones to sustain are those having bigger vision and mission.
Planning to buy a land in Nepal? This post is relevant for you. A lot of us dream to buy a property in Nepal but when it comes to catch the exemplary piece, often, we get jumbled and more precisely we are unassured if given property is the best fit. This is prominently seen in all young adults, especially adults who are living in abroad & looking to buy a property in Nepal. Hence, we are dependent on family members, brokers, distant relatives for their judgement. This results in a slow process, often hidden cost and cases where you also get cheated. Enough with the confusion and sceptics in the further purchase of the property.
Following are the major concerns and questions to ask and get vivid information from your broker if you are buying land in Nepal.
A location is a foremost figure. Decide whether you want to buy a property in Ring Road, Inner Ring Road, Metropolitan Municipality, Sub- Metropolitan Municipality, Municipality.
Bare in mind, land size may sound like least important thing but if you have seriously made up your mind to do investment in real estate, land size does matter. Please know if you want to buy 1 Ropani, 1 Ana, 1 Bigha or 1 Katha land for yourself. Also, you should be sure and aware of the ideal shape of land you want to buy. A reliable “Amin” should be considered for the accurate measurement of the respective land. This will help you to figure out the kind of investment you want to make. Also, saves you from being cheated.
You need to ask your broker about the road size and the accessibility. This terminates if the proposed property is ideal for the 2-4 wheelers or not. This will also give you the insights about feasibility, public transport avenue. This often determines infrastructures like bank, school, hospital and shopping are around. Also one should be very aware of the road expansion project that might overlap their land-to-purchase during the execution.
Decide your investment budget. Price should also be accordant and directly proportional to land size and location you are looking to buy. Often there are lands which are on the verge of rush-sell due to certain reasons and thus their price may alter(usually depreciated value) from the standard ratings. Remember a fair and civil price is appreciated by everyone.
Raikar land has an individual or personal authority towards the property. Whereas, Guthi land means the territory belonging to a group of people. Very often people buy Guthi land without being transparent with its details. Usually, Guthi properties are confined with several disputes, a certain problem, an objection from an old party. This is one of the “Most Common” ways of cheating people in real estate scenario of Nepal. Ensure the kind of your land preference (Guthi/Raikar) before purchasing.
Do not invest over disrupts!!! You got to know the mandatory information before investing in your real estate if they have any of the following:
Mudda, Mohi Hak, AnsaBanda…. Often these questions will save you from making wrong decisions while investing and help you escape from inconvenient traumas.
Mudda means tangled by legal case and you definitely do not want to tie up with MuddaLand right? Just turn over these unnecessary stress. Mohi Hak is a land, been taken care by a respective person for a long span. The representative person is called as Mohi for that land which means he has certain rights to the property and holds legal authority as well. In a lot of cases in Nepal when a person is selling a land to the second party abide with mohi hak then he/she has to first give the mohi his/her rightful amount of share and then transfer the property to a new party. This can be tricky a lot of time.
The ancestral property is the type of property passed on to the children and grand children from their grand parents. Anshabanda, however, means a division of property within a family. During the division of the ancestral land, there might be unsolved matters and disputes among the brothers. This may create unnecessary tantrums and expenditure in the future in which you do not want to get involved.
Field Visit & Naksha Details are supposed to be same. A lot of time property on a field and their demonstration in naksha do not match. You need to check it beforehand and make a transparent deal before you lose the money for good.
Following are the documents you should ask and check before buying property.
The government of Nepal has a property tax policy that has to be paid annually. You would want to check or at least ask your broker if the property tax is clear or not for the property you are buying. It’s an individual party who needs to check before transferring land.
Buying property in Nepal is every Nepalese dream.Land escape of real estate is growing like in any other country. Wondering how to buy property in Nepal? We all know real estate industry is gigantic in Nepal. To buy property which actually is a milestone for many of us can easily become an exhausting experience. If you don’t keep certain key points in mind. If you are one who is planning to invest in Real Estate in Nepal. We understand how overwhelming it can be when you want to buy a property but have no idea where, to begin with. Thus, We have prepared ten tips for the first-time buyer to remember before you buy property in Nepal.
It’s absolutely funny how people just directly jump into which property to buy? Even before they decide, what kind of investment they want to make. First, ask yourself what kind of amount are you looking to invest if it is Commercial Property ( Generating revenue) and also if it’s personal use. A wise man once said Landlords grow rich in a sleep but that’s only if he makes the right amount of Investment.
You need to bear in mind before investing in property, If you are buying for Commercial purpose or for personal use? Buying property for commercial purpose is different than residential.
If you are looking to buy a house for your family try builders who build Colony, Apartments, Villa, housing or area that has a peaceful neighborhood with facilities and access. Well, Good thing about housing complex, you know your neighborhood will be from a similar background. It actually saves your lot of research and time. Just find out if builders and company are trustworthy or not and visit their launch program. Chances are you will get to know everything that you want to.
For a Commercial purpose, You need to look at the amount as a pure investment. In such scenario, best is to keep your eyes, ears wide open and acknowledge if you see anybody selling their property in undervaluing price. That’s not the only and viable solution though. Try investing in areas which are upcoming. Like one close to hospitals, Schools, Airports, Market, highways or one with the development plan. One which can be a tourist attraction is something great to invest it.
A location is everything when you are planning to buy a new property. To have an exact knowledge of where you want to invest is a good in real estate. Location plays an important role in securing your investment.
Doesn’t matter if it is commercial or for a personal purpose you would want to make sure certain kind of services to have while you make your purchase decision. Eg: If it’s a commercial property you want to have public transport access facility close by, restaurants & eateries close by. Similarly, for residential you want schools, department stores, Grocery store and friendly neighborhood with good access to hospital and transport.
Vaastu considered the interplay of various forces of nature involving the five elements of an earth, water, wind, fire and ether and strives to maintain equilibrium as these elements influence, guide and change the living styles of not only human beings but every living being on earth. Thus, they influence our deeds, luck, behavior and other basics of life. Vaastu is a key point you would want to keep in mind if you are buying property in Nepal.
Well, If you are looking to buy house/property local development is something you need to keep in mind, You can easily determine your neighborhood if any new projects being surpassed. That can make and break your investment in a long term. Any place that has government / private sector interest in terms of planning and investment can be a hot cake as the neighborhood also can lead you to setback your investment. A lot of time it will grow real quick with increasing flow of people.
Age of your property can determine it’s current value. Whether the property has 12*12 pillar system or 9*9 Pillar system can also make a difference.
A neighborhood can be quite an interesting factor if you are looking to buy a property in Nepal. You can find a lot of traditional old settlement as well as new extended part of a city with diverse background from different ethnicity, religion and immigrants.