The government has ramped up its monitoring of real estate transactions in a bid to prevent money laundering and align with international financial standards. This move follows Nepal’s inclusion in the grey list of the Financial Action Task Force (FATF) in February this year. The FATF is a global body that develops and monitors standards for combating money laundering and the financing of terrorism. Nepal’s effort to exit the grey list has prompted the authorities to focus on areas with high-value, informal transactions—such as real estate.
Although billions of rupees are exchanged annually in the real estate sector, no suspicious transaction reports (STRs) have been filed from this sector till date. According to the Financial Information Unit (FIU), an autonomous body under Nepal Rastra Bank, there were no STRs related to real estate in 2024, highlighting a significant gap in compliance and oversight.
To address this, the government has enforced the “Directive on the Prevention of Money Laundering and Financing of Terrorist Activities, 2082 (2025),” which makes it mandatory for both buyers and sellers to submit their bank statements and complete Know Your Customer (KYC) forms before any land deed (lilakat) can be registered. The directive aims to ensure that real estate payments are traceable and conducted through formal channels.
Under the new provisions, buyers are required to present a bank statement confirming that the transaction amount has been deposited from their account into the seller’s account. In addition, any transaction exceeding Rs 30 million in a single day must be reported to Nepal Rastra Bank. This requirement applies not just to individuals but also to real estate businesses. According to officials from the Ministry of Land Management, Cooperatives and Poverty Alleviation, these rules have already been communicated to all land revenue offices across the country for immediate implementation.
For preliminary sale agreements (baina), if the advance payment exceeds Rs 1 million, buyers must now submit documentation proving the use of a banking or electronic payment system. Specifically, transactions between Rs 1 million and Rs 5 million must be carried out through banks or electronic payment channels. For amounts exceeding Rs 5 million, payments must be made either electronically or via a "good-for-payment" cheque issued in the seller’s name.
In areas where revenue is collected through the banking system, any real estate transaction above Rs 1 million must follow a strict payment structure. The registration fees and related charges must be paid from the buyer’s account, while the capital gains tax must be deposited into the government’s designated revenue account from the seller’s account.
Officials believe that these stricter measures will discourage money laundering, bring greater transparency to the real estate market, reduce revenue leakage, and help curb corruption in land registration offices. Additionally, the measures are expected to improve the overall transparency of Nepal’s financial system.
In the annual budget for Fiscal Year 2025/26, announced on May 29, the government reaffirmed its commitment to improving Nepal’s financial image and exiting the FATF grey list. The budget outlines plans for necessary legal and institutional reforms and pledges to strengthen the investigation and prosecution of serious financial crimes such as tax evasion, fraud, illicit property accumulation, and money laundering. The government has also committed to empowering relevant institutions and upgrading the national system in line with international standards.
