Real Estate License: Requirements for House & Land Transaction Service Provider in Nepal

I. Introduction

II. What Constitutes a Real Estate Transaction Service?

Under Section 26A (Explanation), “house and land-related transaction” includes commercial or professional services, such as:

1. Assisting any person in buying or selling a house or land (with or without remuneration),
2. Providing consultation or advice for the purchase or sale of real estate,
3. Offering any other professional service related to the transaction of house or land,

Exception: Purchases and sales conducted directly between natural persons based on mutual agreement.

III. To whom the licensing requirement is applicable?

This licensing requirement applies to both natural persons, and legal persons (firms, companies).

However, the requirement to obtain a real estate (house and land transaction) license applies only in those geographic areas or transaction-value thresholds as specified by the Government of Nepal through a notice published in the Nepal Gazette.

IV. Eligibility, Required Documents and Validity

1) Eligibility Criteria

The prevailing legal framework does not prescribe personal qualifications (age, education) for the real estate service providers. However, applicants must submit all required details, provide prescribed documents, pay the applicable fees, and satisfy the authority during its inquiry and verification.

2) Required Documents

For natural persons or legal persons, documents include (as applicable):

1. Application in the format of Schedule-8,
2. For companies/firms:

i. Copy of the company or firm registration certificate established for the purpose of conducting real estate (house and land) transactions

ii. Copy of the Memorandum and Articles of Association (for companies)

iii. Copy of the updated shareholder register

iv. Copy of the Permanent Account Number (PAN) registration certificate

v. Copy of the latest tax clearance certificate up to the most recent fiscal year

vi. Detailed business plan relating to the proposed real estate transaction activities

vii. Copy of the board resolution of the company or firm’s governing body approving the submission for obtaining the real estate transaction license

viii. Details of the applicant’s website, email address, and contact person’s phone number

Note: Applications for obtaining or renewing the license must be submitted to the authority designated by the Government of Nepal in the Nepal Gazette notice, which may be a federal authority, a provincial authority, or a local-level authority.

3) Validity Period

Each license is valid for five years from the date of issuance.

V. Each license is valid for five years from the date of issuance.

1) License Fee Structure

S.N.	Category of Transaction Capacity	License Fee
1.	Individuals/entities conducting real estate transactions up to NPR 50,000,000 (Nepalese Rupees Fifty Million) at a time	NPR 5,00,000
2.	Individuals/entities conducting transactions exceeding NPR 50,000,000 (Nepalese Rupees Fifty Million) (no upper limit)	NPR 10,00,000

2) Renewal of License

License holders must apply for renewal 35 days before expiry of the five-year term. The applicable renewal fee are as follows:

S.N.	Category of Transaction Capacity	Renewal Fee
1.	Transaction capacity up to NPR 50,000,000 (Nepalese Rupees Fifty Million)	NPR 4,00,000
2.	Transaction capacity exceeding NPR 50,000,000 (Nepalese Rupees Fifty Million)	NPR 8,00,000

3) Documents Required for Renewal

Applicants must submit the following documents along with the renewal fee:

1. Details of transactions carried out by the company or firm
2. Audited financial statements of the latest fiscal year
3. Latest tax clearance certificate of the company or firm

4) Renewal After Expiry

If the renewal application is not filed within the prescribed timeline, the license holder may still apply within 90 days from the date of expiry. A late renewal fee of NPR 50,000 is payable in addition to the applicable renewal fee.

VI. Operational Obligations of License Holders

The legal framework imposes several ongoing obligations on individuals and entities holding a real estate transaction license. Under Section 26C of Land Revenue Act, 2034 (1978), the licensing authority is empowered to conduct inspection and supervision of licensed persons at any time. For this purpose, the authority may issue necessary directives regarding the manner in which the license holder must conduct real estate transaction activities.

Correspondingly, license holders are required to fully comply with all directives issued by the authority. They must extend cooperation during inspections and supervision, and are obliged to provide any documents, records, or information requested by the inspecting officer. Failure to comply with these operational obligations may trigger regulatory action, including cancellation of the license.

VII. Requirement to Use the Land Information System (GIS Portal)

The licensed real estate service providers are required to conduct real estate transaction-related activities through the Government’s Land Information System (भू-सूचना प्रणाली). For this purpose, a license holder must operate a Land Service Centre (भू-सेवा केन्द्र) in accordance with the prescribed standards.

If the license holder does not operate their own Land Service Centre, they are required to conduct transactions through the Land Service Centre operated by another licensed real estate service provider.

VIII. Grounds for Cancellation of License

Under Section 26D of Land Revenue Act, 2034 (1978), a license may be cancelled if:

1. It was obtained by submitting false information,
2. The licensee violates the conditions mentioned in the license,
3. The licensee disregards directives given by the authority,
4. The licensee violates the Act or Regulations,The license is not renewed.

The authority may cancel the license at any time upon occurrence of these grounds.

IX. Penalties for Violation

Under Section 26E of Land Revenue Act, 2034 (1978), any person who conducts real estate transactions without obtaining the required license is subject to:

1. a fine of up to NPR 25,00,000; or
2. imprisonment of up to six months; or
3. both.

If the loss (बिगो) caused by such unauthorized transaction can be ascertained, a fine equal to the amount of the loss may also be imposed.

Furthermore, if a licensed person violates the Act, Regulations, or license conditions, the authority may impose a fine equal to ascertained loss, or up to NPR 1,000,000 (Nepalese Rupees One Million) if loss cannot be calculated.

X. Conclusion

The recent amendments to the Land Revenue Act, 2034 (1978) and Land Revenue Regulations, 2036 (1980) introduce a comprehensive regulatory framework governing professional real estate transaction services in Nepal. By mandating licensing, digital record-keeping, and a structured system of oversight, the regime seeks to enhance transparency, reduce risks of fraud, and align the sector with broader compliance objectives, including anti-money laundering considerations. Individuals and entities intending to engage in real estate transaction services must therefore ensure full adherence to the licensing, operational, and reporting requirements to avoid regulatory sanctions and ensure lawful operation.