Land revenue collection rises significantly

In what might be called a sign of improvement in real estate business, revenue collection from land and housing transaction increased by 21 percent in Kathmandu Valley and 220 percent outside the capital during the month ending mid-June. Realty sector has been witnessing slowdown after the Nepal Rastra Bank (NRB), the central bank, tightened its screw lending on realty sector. Improvement in land and housing transactions and subsequent rise in revenue collection in the valley from the very beginning of the current fiscal year has expanded to major cities outside the valley as well. Data compiled by Department of Land Reform (DoLR) shows that the government collected revenue worth Rs 220.4 million from registration of land in the Valley during the review month. It had mobilized Rs 183.3 million during the same month in the last fiscal year. Kathmandu Land Reform Office (LRO) mobilized Rs 83.7 million during the period, up from Rs 60.4 million collected in the same period of last fiscal year. Similarly, LROs in Kalanki, Bhaktapur and Patan collected Rs 32.1 million, Rs 21.6 million and 47.7 million, respectively. However, revenue collection at Chabahil LRO dropped marginally to Rs 35.3 million from Rs 35.9 million recorded during the same month last year. “We have seen improvement in realty transactions and revenue collection in the Kathmandu Valley from the beginning of this fiscal year. The momentum is gradually shifting to major cities outside the valley,” Raju Basnet, statistics officer at DoLR, told Republica. Cities, which have emerged as major migration centers, have reported significant growth in revenue collection with their combined revenue crossing over Rs 168.3 million during the month ending mid-June-this year, up by around 220 percent compared to the amount collected in the same month of last fiscal year. Land revenue collection from Rupandehi, Morang, Sunsari, Janakpur, Chitwan, Makawanpur, Kaski, Banke, Kanchanpur and Kailali have increased in the review month. Kaski reported the highest revenue collection of Rs 25 million, followed by Rupandehi with Rs 24.3 million. Similarly, Morang, Sunsari and Janakpur collected Rs 19.7 million, Rs 19.5 million and 11.6 million, respectively. During the month, Chitwan collected Rs 19.8 million, Makawanpur Rs 12 million, Banke Rs 12.9 million, Kanchanpur Rs 8.3 million and Kailali Rs 9.6 million. These cities had witnessed overheated realty price some three years ago when realty business was at its peak. Despite rise in revenue collection, realty traders said the sector will return to normalcy only after at least couple of years as people are still reluctant to put their money in property fearing possible decline in prices. The government has set a target of collecting revenue worth Rs 4.5 billion from land and housing transactions in the current fiscal year. “We will meet the target easily as realty transactions have been improving nationwide,” said Basnet. Property prices in Kathmandu Valley and major cities across the country had declined significantly after NRB imposed a ceiling on real estate loans in the beginning of 2010.