Can NRN inherit property in Nepal?

The existing laws have recognized the NRN rights to inherit property in Nepal. Inherited Properties have been defined as the properties acquired through the means of purchase, gift, mortgage and partition.

Regarding purchasing of land, there is a limit to the amount of land that you are entitled to purchase as a foreign citizen of Nepali Origin. The law has recognized the following limit of land.

There are various methods of land ownership. We are giving you the brief overview of them so that you as an NRN is going to avail through these provisions if you are going to purchase land in Kathmandu or in any other places of Nepal.

Land Inheritance

The inheritance of land basically means you are going to inherit the land belonging to your ancestors. Foreign citizens are required to take permission of Government of Nepal to have land inheritance. However, if you are a foreigner of Nepalese origin and possess the NRN citizenship of Nepal, you are not entitled to take any permission from any authorities in order to have ownership of your ancestral property.

Investment on Land

As like any other foreign investors, NRNs are also not permitted to make investment in the land of Nepal. The relevant law for making the investment is FITTA 2019. Real estate has not been classified as industry under Industrial Enterprises Act 2076. That is the reason why NRNs are not entitled to invest in Land of Nepal professionally.

By virtue of Mortgage

The laws have allowed the NRNs to inherit properties through mortgage in Nepal. You can do mortgage to any immovable or movable properties as an NRN in Nepal. Regarding Land, there are two ways to do mortgage, named Mortgage without possession( Dristibandhaki ) and Mortgage with possession( Bhog Bandhaki). Let’s see them in detail below.

Mortgage with Possession ( Bhog Bandhak )

In this type of possession, a NRN can act both as a debtor or a creditor. If you have a land and want money, you will transfer the ownership of the land to another person. The creditor will enjoy the possession. It is not required to pay any charge, interest or fee to the creditor. The amount of time that such a property can be mortgaged is similar for NRN as for Nepalese citizen, i.e. 10 years.

If you are a NRN citizen of Nepal, you have to take permission from the Ministry of Foreign Affairs. The secretary of MOFA will grant you the permission after enquiry. If you are a creditor, you will be obtaining the blue covered land owner certificate.

Mortgage without Possession (Dristi Bandhak)

In this type of Mortgage, you will not transfer the ownership of your land in return for the credit from a creditor. But you are entitled to pay fees or interest for the credit you have acquired. The maximum extendable time period of this kind of mortgage is also 10 years and initial time period is only 5 years.

If the debtor doesn’t pay the loan, the creditor should transfer the ownership of the land to him within two years of the expiration of the date for repayment of loan. The creditor has to apply to the relevant authority for transferring the ownership of the land if the debtor is not able to pay the debt within the required time.

Rules for Property Transfer by NRNs

There are two methods for NRNs to transfer their property.

By selling the property

For immovable properties like land, a deed must be filed to the Land Revenue Office. For movable properties, deeds should not be submitted. However, movable assets such as stocks and other financial instruments like bonds are an exception to this.

By donating and gifting the property

There are two kinds of donations or gift- a donation to the person for religious, social, community or public purposes and a gift to another person as a way to show family affection and love. Such a donation can be made such that it will only be effective after one’s death.

In any case, if the valuation of the donation exceeds NPR 100,000, then the deed must be executed and registered with the relevant Land Revenue Office.

Opening of the Bank Account for Transfer of Money for Buying and Selling of Property for NRN

For the purpose of receiving and investing on the properties in Nepal, A foreign citizen with a NRN card can open a foreign currency account in Nepal. A NRN citizen can take away the money obtained in their account to the foreign country of which they are the citizen.