Government Lifts Ban on Land Subdivision in Municipalities without Land Classification

The government has reopened the process of land subdivision (kittakat) even in municipalities that have yet to complete land classification, following the third amendment to the Land Use Regulation, 2022.

With the amendment approved by the Cabinet meeting on Monday evening, the restriction on land plot fragmentation — in effect since the start of the current fiscal year (FY 2025/26) — has now been lifted, according to Joint Secretary Ganesh Prasad Bhatt of the Ministry of Land Management, Cooperatives and Poverty Alleviation.

He said that land subdivision has been allowed in all local levels without land classification until the end of the current fiscal year (mid-July 2026).

“Once the government publishes a notice in the Nepal Gazette, all local levels will be able to resume land fragmentation work,” Bhatt added.

Read: Land Fragmentation Halted in 500 Local Levels

Out of the country’s 753 local levels, 253 have already completed land classification, while 153 are in the final phase, according to the ministry.

The Land Use Regulation was first introduced in 2022 to promote systematic land use and curb unregulated land fragmentation. It had given local governments six months to complete land classification. However, many failed to do so within the timeframe, prompting the government to amend the regulation for the first time in 2023 to allow land subdivision.

Due to delays in classification, the government again suspended land fragmentation and other administrative processes in 620 municipalities and rural municipalities since August 2024.

The regulation was later amended for the second time on September 12, 2024, but as land classification remained incomplete even by mid-July 2025, the government continued the suspension in around 500 local levels starting from the beginning of the current fiscal year. The third amendment has now reopened land subdivision across all municipalities.

As per the Land Use Regulation, Nepal’s entire land area must be classified into 10 categories: agricultural, residential, commercial, industrial, mining and mineral, forest, river/lake/wetland, public use, cultural and archaeological, and other areas specified by the government.

Read: Government Plans to Ease Suspension of Land Fragmentation

Minister for Land Management, Cooperatives and Poverty Alleviation Anil Kumar Sinha had earlier initiated the process of revising the regulation shortly after assuming office in the interim government.

During the suspension of land subdivision, local governments were unable to approve development plans or carry out administrative procedures such as land ownership transfer and survey. Real estate transactions had also slowed sharply — by around 40 percent compared to May-June this year, according to real estate entrepreneurs.