KMC announces 10-year property tax holiday for dedicated parking buildings

Kathmandu Metropolitan City (KMC) has introduced a new tax facility to push private investment in dedicated commercial parking buildings inside the capital.

According to the Economic Act 2083, if a developer constructs a building that is used only for vehicle parking on a commercial basis, the property will receive 100% exemption on property tax for 10 years from the date the building is completed and brought into use.

What is KMC offering?

• 100% property tax waiver for 10 years on buildings certified and operated purely as commercial parking spaces
• The waiver applies from the completion date of construction, as recognized by KMC
• The facility is meant for multi-storey or dedicated parking structures, not for mixed-use commercial complexes

KMC has already mentioned in recent notices that the property tax of parking lots developed with the purpose of commercial vehicle parking can be exempted for a fixed period, and this new Economic Act now stretches that benefit over a full decade.

Why is this important for vehicle owners?

Vehicle ownership in Kathmandu has steadily increased, but legal public parking spaces have not kept pace. Many motorists are forced to park on roadsides or in unmarked areas, which contributes to congestion, fines, and disputes.

By removing property tax for 10 years, KMC is trying to make investment in organized parking more attractive for builders and businesses. Lower fixed costs can improve project viability for:

• Multi-level parking buildings in core commercial zones
• Standalone parking facilities near markets, offices and hospitals
• Structured parking hubs around major junctions and bus routes

If more developers respond to this incentive, city drivers could see:

• More formal parking options in busy areas like New Road, Ason, Putalisadak, Gongabu and Koteshwor
• Clearer rates and rules for parking, instead of informal roadside fees
• Some relief from roadside parking chaos and better traffic flow on main corridors

Conditions and compliance

KMC has previously warned that properties approved and certified for parking must not be used for other commercial purposes. If a building enjoying the waiver is later found to be using the space for shops, offices or other activities, KMC can:

• Cancel the tax exemption
• Recover applicable taxes
• Take legal action as per municipal regulations

For developers and investors, this means:

• The building design, map approval and actual use must align with "commercial parking only"
• Long-term business planning should be based on parking services, not mixed commercial use

What it means for future parking projects

For Nepali vehicle buyers, the key takeaway is that KMC is formally backing structured parking through a 10-year tax holiday. While the policy itself does not guarantee lower parking fees, it reduces a major cost component for operators and could encourage:

• More multi-storey parking buildings in the city
• Better managed, safer parking for both cars and two-wheelers
• Gradual improvement in urban traffic management as roadside parking pressure decreases

Motorists should watch how many new parking projects are proposed under this scheme in the coming years. The real impact on everyday parking convenience will depend on how actively private developers use this tax benefit and where these new facilities are built.