Kathmandu, October 4
The government has proposed a new legal framework aimed at helping citizens aspiring to build their own homes, with provisions for subsidised loans, tax exemptions and affordable instalment plans.
The Ministry of Infrastructure Development has tabled a bill in the Federal Parliament seeking to amend the Building Act, 1998. The proposed legislation would facilitate financial packages in coordination with banks and financial institutions for the construction of modern, safe, earthquake-resistant and smart homes.
Once the bill is enacted, procedures to be introduced under the law could allow subsidised housing loans with down payments of as little as Rs 500,000 and monthly instalments of around Rs 11,000.
Legal provision for subsidised loans and instalments
Clause 16J of the proposed bill introduces special provisions for the “construction and promotion of smart homes.”
The provision allows all three levels of government to coordinate with banks and financial institutions, insurance companies and cooperatives to provide subsidised loans for the development of safe and technology-friendly housing aimed at improving citizens’ quality of life.
The government may also provide grants, tax exemptions and other financial incentives to encourage the construction of such homes.
The provision is intended to make it possible for low- and middle-income families to build or purchase homes without having to arrange a large amount of capital upfront, instead paying a minimum down payment followed by regular monthly instalments.
Free map approval and full exemption from fees
The bill also seeks to reduce the cost and administrative burden involved in home construction.
Clause 8 classifies residential structures based on standard designs that are safe and earthquake-resistant as “smart homes.”
Under sub-clause 11(2), local governments would be required to provide a 100 percent exemption from map preparation and map approval fees when applications are submitted for the construction of such smart homes and buildings using traditional technologies.
Local governments would also be required to provide standard house designs free of charge.
Cash grants for low-income families building their first home
The bill also proposes financial assistance for extremely poor families building their first residential home for their own use.
Under the proposed citizen housing provision, local governments would provide free technical consultation, standard designs and locally available construction materials.
In addition, extremely poor families recommended by local governments would be entitled to direct cash grants of at least Rs 50,000 from the federal government and Rs 25,000 from the provincial government.
The exact mechanism for implementing the subsidised loans, instalment plans and other financial incentives would be determined through guidelines and financial procedures to be introduced after the bill is passed.
The proposed framework is expected to make safe housing more accessible to low-income citizens by combining low upfront payments, affordable monthly instalments, fee exemptions and direct government support.
