Real Estate Businesses and Agents in Nepal — Title, Tax, Company and AML Records

Separate the roles

A property owner, developer, dealer and agent have different rights, income and obligations. Determine who holds title, who supplies the service, who receives consideration and whether the activity is a business. Personal land disposal should not automatically use a developer's treatment, while agency commission is different from sale proceeds.

Review land/title law, provincial/local charges, income tax, VAT where applicable, business registration and AML covered-activity rules. Rates and registration charges depend on the transaction and location, and annual tax changes must be applied to the correct period.

Transaction file

Finance Act 2083 changes specified land/building capital-gain collection provisions. Do not carry forward an old rate table or assume that collection at registration always settles every taxpayer's liability.

Nepal example

An agent receives NPR 200,000 commission for arranging a sale priced NPR 20 million. The agent's revenue is the commission under its contract, not the full property consideration merely because it helped collect a deposit. The seller's gain, title transfer and tax are separate analyses. If funds pass through an intermediary account, preserve the authority and flow evidence.

Controls

Verify identity, beneficial ownership where required, title and authority before accepting a transaction. Keep client funds distinguishable from business funds. Document related-party arrangements, unusual payment patterns and lawful reporting decisions. A tax voucher cannot cure defective title or missing seller authority.

Completion

Reconcile agreements, bank flows, registration evidence, commission invoices and tax records. Check current local charges, licensing and sector AML requirements for the transaction.

Reconcile title, proceeds and the agent’s fee

A sale file should identify the legal seller, title particulars, buyer, contract price, deposits, adjustments and the completion event. Compare that file with the registration and bank records. A tax collected during registration does not cure a missing seller authority, title dispute or incomplete transfer.

Where an agent holds a deposit, record whether it is held for the client or earned under the agency contract. Preserve the mandate, recipient, transfer to the entitled party and any fee deducted. Client money should not disappear into the agent’s revenue account merely because it passed through the business bank account.

Keep the seller’s gain or business-income computation separate from the agent’s commission invoice. The taxpayer, asset category, holding facts and current annual collection provision determine the relevant analysis. A rate appropriate to one personal disposal should not be applied automatically to a company’s property-trading activity.

For an AML-covered service, document the role, customer, beneficial owner where required, authority and source of the relevant funds. Escalate inconsistent identity, unexplained third-party payments or unusual settlement instructions through the confidential process. A low commission or a completed registration should not replace the required assessment. Retain the commercial and compliance records together while restricting access to sensitive customer information.