Property taxation is widely recognized as a stable and efficient source of local government revenue and a critical instrument for strengthening fiscal decentralization. In Nepal, the transition to federalism under the 2015 Constitution of Nepal has expanded the fiscal authority of local governments, including the power to levy property taxes. Despite this constitutional mandate and the legal framework established by the 2017 Local Government Operation Act, property tax revenue remains substantially below its potential. This study critically examines institutional constraints, prevailing valuation practices, and reform prospects for property taxation in Nepal. Adopting a qualitative doctrinal and institutional analysis approach, the study reviews constitutional provisions, fiscal legislation, Local Government Economic Acts, government reports, and relevant academic literature. The findings reveal three interrelated challenges: institutional fragmentation between land administration and local governments; reliance on administratively determined minimum land values disconnected from market realities; and limited digital integration of cadastral and tax information systems. These weaknesses undermine revenue productivity and administrative efficiency. The study argues that effective reform requires legal harmonization, adoption of market-based mass appraisal systems, digital interoperability between land and tax databases, and enhanced technical capacity at the local government level.
S B Ghimire (Thu,) studied this question.