Govt allows sale of Rs 200 billion worth of previously “Held” real-estate assets after lifting land ceiling restrictions

KATHMANDU: In a major policy shift aimed at reviving Nepal’s stagnant real-estate market, the government has decided to allow housing and land development companies to sell properties previously locked due to land ceiling restrictions. The move is expected to immediately unlock nearly Rs 200 billion worth of real-estate assets that had been on hold for years.

The decision follows the Cabinet’s move to recommend an ordinance to President Ram Chandra Paudel, proposing the ninth amendment to the Lands Act, 2021, enabling developers to sell plots or housing units even if the land area exceeds the previously imposed ceiling.

The government has stated that licensed real-estate developers—who purchase land, develop plots, or construct houses and apartments—will now be permitted to sell assets held up by the “haddbandi” restrictions. The Ministry of Land Management confirmed that once the ordinance is issued, both developers and homebuyers will finally be able to complete transactions and transfer ownership titles.

Longstanding Demand of Developers Addressed

For nearly five years, around 40 real-estate companies have been unable to sell housing plots and apartment units due to the government’s interpretation that land acquired above the allowed ceiling could not be sold, even if developers had purchased it legally before 2076.

Nepal Land and Housing Developers’ Association President Vishnu Prasad Ghimire welcomed the government’s decision, calling it “long overdue relief.”

“The government has finally addressed a demand we have raised for years,” Ghimire said. “Because of the ceiling restrictions, developers were stuck, buyers couldn’t get land ownership papers, and nearly Rs 200 billion remained frozen. The ordinance will unlock the market.”

He added that many customers had already paid advance deposits and were even living in housing units but had been unable to obtain land ownership documents because the plots remained legally unsellable.

Ordinance Based on Earlier Parliamentary Approval

The ordinance follows a legal provision already approved by the House of Representatives. The previous government had registered a bill on Baisakh 23, allowing developers to sell land exceeding the ceiling if it was used for approved housing projects. The bill was passed by the House on Bhadra 13, but became inactive after the dissolution of the House, preventing it from becoming law.

Land Management Minister Anil Kumar Sinha confirmed that the Cabinet drafted the ordinance based on the same provisions already endorsed by Parliament.

“This matter has already been approved by the House,” he said. “Developers who purchased land above the ceiling with prior approval were unable to sell. The ordinance will correct that and support planned urban development.”

Relief for Developers, Banks, and Consumers

Due to the restrictions, not only developers but also banks that financed housing projects were facing severe risks, as billions in real-estate investments were tied up in unsellable properties. Buyers who had made partial payments were unable to secure land titles, creating legal and financial uncertainty.

Ghimire noted that the move will have broader macroeconomic benefits.

“Real estate is directly linked to banking, contracting, steel, cement, and employment,” he said. “The government’s decision will help activate the entire economy.”

The government has already introduced several regulatory changes in recent months, including reopening plot subdivision (kittakat) and requiring a license for real-estate transactions above Rs 30 million, as part of its broader efforts to formalize and stabilize the property market.

With the new ordinance expected to be issued soon, real-estate developers anticipate a surge in transactions as long-stalled housing and apartment sales finally move forward, providing much-needed liquidity to the sector and the broader economy.