Land Fragmentation Halted in 500 Local Levels

Fragmentation of land plots has been halted in around 500 local levels after municipalities failed to complete land classification as mandated by the Land Use Act.

Kirtipur Municipality has made two unsuccessful attempts to classify land according to the law. The process stalled after local residents protested, fearing restrictions on the use and sale of their property.

Under the Land Use Regulations, Nepal’s entire territory must be categorized into 10 types: agricultural, residential, commercial, industrial, mining and minerals, forest, rivers-lakes-wetlands, public use, cultural and archaeological significance, and other government-specified areas. Local governments hold the authority to conduct this classification, but the final deadline expired in mid-July.

“Since land fragmentation is not allowed without classification, we have completely halted the process,” said Kailash Bista, an official at Kirtipur Municipality. “Except for partition through inheritance, all types of land sales and subdivisions have stopped.”

According to Bista, locals opposed classification fearing that if their land was not designated residential, they would be unable to sell it as housing plots. A similar situation has emerged in Chandragiri Municipality.

The Ministry of Land Management, Cooperatives, and Poverty Alleviation reported that as of mid-July, only 253 out of 753 local levels had completed land classification, leaving nearly 500 municipalities where subdivision has been suspended.

The government implemented the Land Use Regulations in May 2022 to ensure proper land use and prevent uncontrolled fragmentation. Initially, local levels were required to complete classification within six months. However, citing a lack of manpower and technology, deadlines were extended multiple times—the latest to mid-July 2025—but most local levels failed to comply.

“With classification pending, the government has enforced a halt on all land subdivision in non-compliant areas since mid-July,” said ministry spokesperson Ganesh Prasad Bhatt. “Only inheritance-related partitions are allowed; transactions for registration, subdivision, surveying, and development plan approvals are suspended.”

The halt is expected to impact property transactions despite Nepal Rastra Bank’s flexible monetary policy aimed at boosting credit flow into housing and real estate.

Last year, the government also suspended subdivision for over a month in 620 local levels that missed the deadline, disrupting land administration activities until another extension was granted.

On September 12, 2024, the government amended the Land Use Regulations (2079), setting a final deadline of mid-July 2025 for municipalities to complete classification. The ministry has warned of strict enforcement going forward.