Tax on property income in Nepal
Taxation Researcher | October 15, 2020
Effective Tax Rate on Rental Income
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Global Property Guide research
Nonresidents are taxed on their Nepalese-sourced income. Married couples may be taxed jointly or separately.
Income earned by nonresidents is taxed at a flat rate of 25%.
Rental income earned by nonresidents from leasing property is subject to 25% withholding tax.
Acquisition costs and related expenses are deductible when calculating taxable capital gains. Capital gains realized from selling real property that are used in business are considered ordinary income and taxed at the standard income tax rate.
Income and capital gains earned by corporations are taxed at a flat rate of 25%. Income-generating expenses and operating expenses are deductible when computing for the taxable income.
Urban House and Land Tax
The urban house and land tax is levied on the value of the property. Depreciation is taken into account, at rates ranging from 0.05% to 1.50% per year, depending on the type of construction of the house.
URBAN HOUSE AND LAND TAX
|TAX BASE, NPR (US$)||
|Up to 1 million (US$9,009)|
|1 million - 2 million (US$18,018)|
|2 million - 3 million (US$27,027)|
|3 million - 5 million (US$45,045)|
|5 million - 10 million (US$90,090)|
|Over 10 million (US$90,090)|
|Source: Global Property Guide|