(1) The rural municipality and municipality shall levy property tax on houses and real estate within their area.
(2) When property tax is levied according to sub-section (1), property tax shall be levied on the house and the land occupied by that house, and land tax (property) shall be levied on the remaining land and other land that is not a house in accordance with section 56. Explanation: For the purpose of this section, "land occupied by the house" means the area of ​​the land occupied by the house and the additional land up to a maximum of that area.
(3) For the purpose of sub-section (1), valuation of houses and real estate shall be done on the following basis:-
(a) Size, type, construction and condition of use of houses and real estate,
(b) the market value of houses and real estate and the depreciation value of houses,
(c) Commercial or residential use of houses and real estate.
(4) According to sub-section (1), while determining the property tax rate of houses and real estate, it shall be done on the basis of citizens' standard of living, economic standard and ability to pay taxes.
(5) Notwithstanding anything contained elsewhere in this Act, property tax shall not be levied on the following houses and immovable properties:-
(a) Houses and land owned by the Government of Nepal, the State Government and the local level,
(b) Houses and immovable property of Government Hospitals,
(c) Houses and lands owned by Guthi,
(d) Houses and immovable property of government educational institutions, companies, committees, authorities, boards and government institutions operated without the aim of profit,
(e) Houses and real estate of associations, organizations operating without the purpose of profit,
(f) Houses and properties of religious institutions (temples, monasteries, churches, mosques etc.),
(g) Water collection ponds, power plants, Masanghat, graveyards, Karwala, Mazars, airports, bus parks, stadiums, parks, public use places,
(h) Houses and estates of embassies, commercial missions, diplomatic missions.