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Dry land tax accounts for the largest share of revenue, followed by building tax
The government collected nearly Nu 659.770 million (mn) in land and property taxes during the 2025-26 fiscal year, with dry land tax accounting for more than three-quarters of the total revenue, according to figures released by the Ministry of Finance (MoF).
The MoF reported total collections of Nu 659.770 mn from four tax categories: dry land, building, vacant land, and wet land.
Dry land tax generated the largest share at Nu 511.404 mn, accounting for approximately 77.5 percent of total collections. This is a significant contribution of taxable dry land to Bhutan’s domestic revenue.
Building tax was the second-largest source of revenue, contributing Nu 138.573 mn, or about 21 percent of the total. Together, dry land and building taxes accounted for more than 98 percent of all land and property tax collections during the fiscal year.
Revenue from vacant land tax amounted to Nu 5.616 mn, while wet land tax generated Nu 4.176 mn, representing less than two percent of the total combined collections.
The figures show a sharp disparity among the four categories, with dry land and building taxes remaining the government’s primary sources of revenue from land and property.
Bhutan’s land and building tax system has undergone significant reforms over the years. While land taxes have existed in various forms for decades, the modern taxation framework was introduced through the Land Tax Act of 1992, which established standardized rates for land and building taxes nationwide. Those rates remained largely unchanged for nearly three decades.
The enactment of the Property Tax Act of Bhutan 2022 marked the country’s most comprehensive overhaul of property taxation. The legislation modernized the tax system by consolidating the taxation of land and buildings under a single legal framework, with detailed implementing rules coming into effect in 2025.
The Act also introduced tax concessions aimed at supporting agriculture and encouraging productive land use. Wet land, or chhuzhing, receives a 90 percent tax concession, while cultivated dry land, or kamzhing, qualifies for a 50 percent concession, reflecting the government’s efforts to strengthen food security and sustain agricultural production.
Revenue collected from land and property taxes is administered by the Department of Revenue and Customs, MoF. The domestic revenue reduces reliance on external financing, and helps to finance the annual national budget, which helps ease the expenditures on education, healthcare, infrastructure, local government services, and other public programs.
