Revenue collection from land, property transactions up 30pc

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KATHMANDU, FEB 10 -

Revenue collection from land and property registrations has gone up by 29.29 percent in the first six months of this fiscal year,  showing signs of revival of the real estate sector.

The government collected Rs 2.27 billion revenues from land/property transactions over the period, compared to Rs 1.75 billion collected a year ago, according to the data of Department of Land Reforms and Management.

“The data reflects some improvement in the realty sector,” said Min Man Shrestha, general secretary of Nepal Land and Housing Developers’ Association. “After a three-year slump, the ongoing recovery is part of a cycle.”

There were no major fluctuations in monthly collection as well. In the first month (mid-July-mid August), the government collected the highest Rs 434 million. The following months, except for the fourth (October-November), also posted year-on-year revenue growth.

Shrestha said small realty transactions have surged lately. “Transactions below Rs 6 million are taking place well,” he said. “It is because transactions below Rs 10 million don’t fall under the category of realty loans and buyers/sellers should not disclose their income source.” According to him, banks are not extending loans for bulk transactions.

Over the review period, the Kathmandu valley had a major share in revenue collection from the registrations of land/property. The valley contributed almost half of the collection, with the five land revenue offices of the valley collecting Rs 1.14 billion, according to the department.

Realty traders say the affirmative action from the government and the central bank is must to revive the sector as the crisis in the sector has created problems for bankers and the ordinary people.

Due to recession in the sector, major realty trader Sudhir Basent has failed to complete his housing projects and people placing bookings for apartments are suffering. On the other hand, depositors of Oriental Cooper-ative promoted by Basnet are not getting back their deposits and his airline company—Agni Air—has remained grounded.

Realty traders have hailed the government’s plan to ensure subsidised loans for high-level government officials. They also have demanded that foreigners be allowed to purchase apartments here. Although the government introduced such a policy through the budget, it has not been implemented so far.

Other demands of realty traders include the central bank allow banks to extend loans up to 80 percent of fare market value from the existing 60

percent; authorities allow developers to complete the projects; a cut in bank interest rates; and one window system to fulfil different regulatory requirements before starting construction of a project.

Posted on: 2013-02-10 08:57