Step-by-Step Guide: How NRNs Can Buy Property in Nepal

To Non-Resident Nepalis (NRNs), Nepal is not only a place of birth, but also a place of attachment, a place of culture, and a place of home. Even when they go abroad due to careers, education, and family life, the urge to own a piece of Nepal never goes away. Owning property is one means of protecting roots, future investment, and keeping in touch with the past.

Over the past few years, urbanization has led to a real estate market boom in Nepal. The rapid development of cities such as Kathmandu, Lalitpur, Pokhara, Chitwan, and Biratnagar has made property ownership a good financial investment. From luxury apartments to picturesque vacation homes, NRNs have a wide array of property choices. Nevertheless, the procedure of purchasing property is associated with law, paperwork, banking regulations, and professional advice.

This step-by-step tutorial describes how NRNs can buy property safely in Nepal, how to avoid the most frequent traps, and how to make investment choices.

Step 1: Legal Framework for NRNs to Buy Property in Nepal

Until 2007, Nepali citizens could only own property. However, NRNs are now restricted in their property rights with the Non-Resident Nepali Act, 2007. These rights are different according to the type of NRN:

• NCRA (Nepali Citizen Residing Abroad): Nepali citizens living abroad. They are entitled to almost equal property rights as citizens, subject to land ceiling regulations.
• FCNO (Foreign Citizen of Nepali Origin):People of Nepali origin holding foreign passports. They can only enjoy their rights in residential properties but land size and location are restricted.

Land Ceilings for FCNOs:

• Kathmandu Valley: 2 ropani.
• Terai municipalities: 8 kattha.
• Other municipalities: 4 ropani maximum.
• Terai village lands: 1 bigha or less.
• Hill and rural: 10 ropani.

 NRNs are not allowed to purchase commercial, industrial or agricultural land directly, but may do so via approved foreign investment channels.

Step 2: Types of Property NRNs Can Buy in Nepal

NRNs can choose between a number of property options based on lifestyle and investment goals:

• Apartments & Penthouses: The apartments and penthouses are convenient and low-maintenance and are best suited to NRNs who visit Nepal on a regular basis.
• Independent residential houses: These are appropriate in cases where the family intends to go back or move in the future.
• Plots of land: There are restrictions on the size of land, particularly beyond Kathmandu Valley. Land is speculative, but it appreciates over time.
• Vacation Villas and Cottages: Ideal to spend your retirement or leisure life, particularly in picturesque locations such as Nagarkot, Dhulikhel, and Pokhara lakeside.

At Punarvaasu Real Estate, we assist NRNs to find the right property to suit their lifestyle requirements, be it an apartment in the city or a holiday home in the countryside.

Step 3: Key Documentation and Requirements for NRNs

In Nepal, property transactions are paper intensive. With proper-preparation, it is an easy and safe process.

• Obligatory NRN documentation:
• NRN ID Card (Government of Nepal).
• Valid Passport (foreign and/or Nepali in case of dual documents).
• MoFA Approval Letter (FCNOs only, must be obtained prior to purchase).
• Remittance evidence showing that the purchase money was transferred legally through banking.
• PAN (Permanent Account Number) to pay tax, rent, or capital gains.

Documents of the seller, such as Lalpurja (title deed), tax receipts, kitta/trace map, and citizenship proof, must always be checked carefully. Learn more about the documents needed before buying and selling property in Nepal. At Punarvaasu Real Estate, we help clients prepare, check, and verify all documents to avoid costly mistakes.

Step 4: Navigating Financial Options for NRNs in Nepal

Across-border management of finances is one of the greatest challenges facing NRNs. The banking system in Nepal offers systematic solutions:

• Formal Remittance Accounts: All the money to buy property should be transferred through formal banking systems (SWIFT transfers or accepted remittance).
• NRN Savings Accounts: Banks are providing good interest rates on NRN accounts in both NPR and foreign currencies.
• Home Loans to NRNs: There are banks that offer mortgages to NRNs. But there are differences in loan-to-value ratios, guarantor requirements, and repayment terms.

Pro Tip: Do not use informal or unknown channels. Unauthorized payments may cause tax, registration, and ownership issues.

Step 5: Engaging a Lawyer or Real Estate Consultant for NRN Property Deals

The property market in Nepal is often complicated- ownership disputes, fake documents, and unclear land titles are the norm. In the case of NRNs working outside their home country, they can hardly check these facts personally.

Hiring a trusted lawyer or real estate consultant will benefit NRNs by providing:

• Checks on title and dispute.
• Writing and editing of bilingual contracts.
• Co-ordination with banks, notaries, and government offices.
• Fraud or latent liability cover.

We combine our legal experience with extensive market understanding at Punarvaasu Real Estate, so that our NRN clients feel secure and safe.

Step 6: Understanding Taxes and Fees for NRNs Purchasing Property

The taxes and charges that buyers should expect when buying property in Nepal include:

• Registration Duty (Buyer): Approximately 4-5 percent of the market value of the property (could be different by province).
• Capital Gains Tax (Seller): 7.5 percent on property that has been held less than 5 years, 5 percent on property that has been held longer than 5 years. Primary homes may not be taxed.
• Annual Property/House Tax: This is paid to local municipalities.
• Service Charges: Law, agent, surveyor, and banking services (typically 1-3%).

A full cost breakdown should always be requested before committing so that there are no surprises later.

Step 7: Finalizing the Property Purchase and Ownership Transfer

The final process is to have the property registered in the name of the NRN. Here’s how it works:

• Seller settles dues (including taxes).
• The buyer sends money (through remittance or compulsory e-payment over NPR 5 million).
• The Sale Deed is signed in the presence of both parties before the Land Revenue Office (Malpot).
• Signatures, photos, and fingerprints are captured.
• Registration fees and taxes are paid.

The purchaser is given a Lalpurja (title deed). In the case of FCNOs, it is given in blue color to denote special NRN ownership, normally it is in red color.

Real-Life Story: How We Helped Our Client to Avoid an Expensive error

Mr. Shrestha, an Australian client of ours who is also an NRN, was keen to buy land in Kathmandu. He discovered what appeared to be a lot on the Internet and was on the verge of sending money straight to the vendor.

Luckily, he contacted Punarvaasu Real Estate prior to the payment. We did due diligence and found out that the land was in a court dispute over inheritance claims. By doing so, he would have risked losing money and property.

Rather, we assisted him in locating a confirmed house in Lalitpur, took him through the MoFA approvals, made sure his remittance was duly recorded and the transfer was completed. He is now the owner of a safe property and can relax knowing that his investment is safe.

Conclusion: Tips and Best Practices for NRNs Buying Property in Nepal

Purchasing property in Nepal as an NRN is not only a financial choice, but also an emotional reunion and a connection to home forever. However, success requires knowledge, preparation, and professional advice.

Quick Tips for NRNs:

• Always carry your NRN ID Card
• Move money through formal banking
• Check ownership documents prior to any payment
• Hire an experienced real estate agent and attorney
• Be aware of tax and property expenses

In the case of commercial plans, direct purchase is not to be used, but the foreign investment route.

Our mission at Punarvaasu Real Estate is to assist NRNs to invest safely and confidently in Nepal. We offer professional advice throughout the consultation to closing to make the process as smooth as possible. Being a property owner in Nepal is not only an investment, but it is your way home. Your vision of a safe, secure, and meaningful investment can be achieved with the proper steps.