Update (16:48 NST, October 3, 2026)
The ‘Building Act, 2083’ bill was registered at the Federal Parliament Secretariat on October 3, 2026, clarifying an earlier report that stated October 2, 2026. The Ministry of Infrastructure Development, led by Minister Sunil Lamsal, prepared the bill.
The proposed legislation includes stringent new provisions to deter illegal construction, according to the Ministry of Infrastructure Development. Individuals who build homes without approved maps or in violation of specified building standards could face fines of up to Rs 1 million.
Furthermore, the bill proposes measures such as freezing property transactions and cutting off basic services like water and electricity for those who fail to comply. These provisions aim to grant local levels, Nepal’s local governments, stronger authority to control and prevent unauthorized building.
Update (14:33 NST, October 3, 2026)
The Ministry of Infrastructure Development has clarified that the ‘Building Act, 2083’ bill proposes to provide local construction materials, including wood, stone, sand, gravel, and soil, free of charge to first-time homeowners who do not own safe housing elsewhere in Nepal. This provision applies to those building traditional or indigenous style homes and sheds.
The bill, registered by Minister of Infrastructure Development Sunil Lamsal on October 2, 2026, also outlines additional subsidized loan options for middle-income families. These include monthly installments of Rs 15,000 for a Rs 1 million advance, Rs 20,000 for a Rs 1.5 million advance, Rs 30,000 for a Rs 2 million advance, and Rs 35,000 for a Rs 2.5 million advance.
Furthermore, the proposed legislation includes provisions for risk insurance, tax exemptions, and other financial incentives for middle-income families. It also proposes that the government will relocate disaster-affected, unsafe, and high-risk settlements to secure locations and construct new homes for them.
A new bill registered in Nepal’s federal parliament seeks to incentivize the construction of modern, safe, and earthquake-resilient ‘smart homes’ by offering financial support to citizens. The proposed amendment to the Building Act, 2055 (1998), registered by Nepal’s Ministry of Infrastructure Development, includes provisions for cash grants for the most impoverished families and subsidized loans for the middle class.
Financial Support for Homeownership
The bill, titled ‘Building Act, 2083’, proposes a direct cash grant of up to Rs 75,000 for extremely poor families building their first residential home for personal use. This includes Rs 50,000 from the federal government and Rs 25,000 from provincial governments, upon recommendation from local levels, Nepal’s local governments. Additionally, for these first-time homeowners, they will provide free technical consultation, sample designs, and access to local construction materials.
For middle-income families, the bill outlines a subsidized loan scheme for constructing ‘smart homes’. These homes, defined as earthquake-resilient structures based on standard designs, would range from 900 to 1,300 square feet with construction costs between Rs 2 million and Rs 7.5 million. The loan facility aims to ease the burden of raising large capital upfront. Options include a Rs 500,000 down payment with monthly installments of approximately Rs 11,000 over 15 years, with other repayment plans available based on higher down payments.
Streamlining Construction Processes
The proposed legislation also aims to simplify the home construction process. Under the bill, Nepal’s local governments will be mandated to provide a 100% exemption on map preparation and approval fees for ‘smart homes’ and traditional buildings that meet safety and earthquake-resistance standards. Local levels will also be required to provide sample maps for such buildings free of charge.
Background and Implementation
The original Building Act was enacted in 1998. This amendment comes as Nepal’s constitution guarantees the right to housing as a fundamental right. Previous initiatives, such as the ‘Mahendra Narayan Nidhi Poor Housing Program’ in Madhesh Province and the ‘Safe Citizen Housing Implementation Procedure, 2075’, have also aimed to address housing needs for low-income families.
Nepal’s Ministry of Infrastructure Development, formed in May 2026, has spearheaded this bill. Prime Minister Balen Shah announced the bill’s registration on October 3, 2026. However, the bill must be passed by the federal parliament to become law. Following its passage, detailed procedures and financial directives will be developed to govern the subsidized loan and grant schemes, outlining coordination mechanisms between different levels of government and financial institutions.
Open Questions
Key details regarding the identification criteria for ‘extremely poor families’ eligible for grants beyond local recommendations are yet to be clarified. Furthermore, the exact timeline for the bill’s passage through parliament remains unknown. The precise coordination mechanisms between federal, provincial, and local governments, along with banks, insurance companies, and cooperatives, will be defined in the upcoming directives.
