Four years after the government issued the Land Use Regulations, only 338 municipalities have classified real estate. Out of a total of 753, only 44.89 percent of municipalities have classified real estate with plot-wise details, according to the Ministry of Land Management, Cooperatives and Poverty Alleviation.

According to the ministry, 47 municipalities have not yet started the classification. A total of 164 municipalities are preparing the basis and criteria and updating the maps and preparing the plot-wise details. 138 municipalities are preparing the basis and criteria and updating the maps. 51 municipalities are preparing the basis and criteria and 15 municipalities have only allocated agricultural areas.

Due to the failure of the municipalities to classify, the plot-cutting was stopped in 500 municipalities since Shrawan of the current fiscal year. Businessmen had been saying that the property transaction had decreased due to the stoppage of plot-cutting. At the end of last Kartik, the government amended the Land Use Regulations, 2082 and opened the plot-cutting.

Since the municipalities did not classify on time, the government has already amended the Land Use Regulations, 2079 for the third time in last Kartik. Land administration work, including plot-cutting, had been stopped in 620 municipalities since the beginning of Bhadra, 2081. At that time, only 133 municipalities had completely classified their land. Immediately after, on 27 Bhadra 2081, the Land Use Regulations, 2079 were amended for the second time, giving municipalities until 2082 Asar to classify land. As of 2082 Asar, only 253 municipalities had completed the classification, while the division of land had stalled in 500 municipalities, according to the ministry.

When the regulations were issued in Jestha 2079, there was a provision to designate agricultural areas by opening four forts within 6 months. By Mangsir 2079, only a few municipalities had allocated agricultural areas. After that, the land had to be classified into all 10 areas. However, after most municipalities did not classify, the regulations were amended on 32 Shrawan 2080 and a provision was made to designate agricultural areas by opening four forts within one year.

The first amendment to the regulations allowed residential and commercial land up to 80 square meters in area and agricultural land up to one ropani. Earlier, residential land could not be divided into areas less than 130 square meters. In the case of agricultural land, there was a provision that less than 500 square meters in the valley and 675 square meters in the Terai and inner Madhesh could not be divided into plots.

The government has set separate standards for agricultural, residential and commercial purposes in the land allocated by classification. The regulations state that the local road standards must be met for commercial housing. After the municipalities did not classify even after extending the period of one year from the first amendment, the ministry amended the regulations for the second time in Bhadra 2081. According to the regulations, the land will have to be classified into 10 categories including agriculture, residential, industry, forestry, mining and minerals, and commercial.