Buying considerations

  1. There are 2 types of titles in Cambodia, soft titles and hard titles. A vast majority of the titles are ‘soft’ titles which are registered with the local authorities. ‘Hard’ titles are titles issued on a national level.
  2. There are three types of land tenure which exist in Cambodia, Namely freehold (fee simple, unrestricted), leasehold (long term leasehold of 15 years and above and renewable) and concessions (conditional leases granted by the government over state private land)
  3. A foreigner can own strata property in Cambodia, up to 70% of the apartment, but not the ground floor.
  4. Foreigners can also own 49% of private properties if they are partnered with a Cambodian legal entity who owns the other 51%.
  5. Currently, there are very few banks that offers loans for foreign buyers. The loan interest can vary from 10% to 12% PA.
  6. Foreigners cannot own land in Cambodia, but can exercise control by
    • Buying through a local company
    • Leasing the land
    • Acquiring Cambodia citizenship to buy the land
    • Buying the land through a Cambodian nominee

Buying procedure

  1. Due diligence
    • Conduct a title search before purchasing properties. A recent title search would be useful. There could be other encumbrances on the land which cannot be found on the title deed, ie a senior politician’s claim on the land, so buyers have to be prepared for any surprises.
    • Obtain information on the property from the Commune council official.
    • If the seller is a company, the buyer should obtain a copy of the ID of the person acting on behalf of the company, and a certified/notarized copy of the certificate issued by the Ministry of commerce. A power of attorney, a resolution signed by the board of directors authorising the abovementioned person to represent the company at the land office is also needed.
    • There are currently no restrictions on the remittance or repatriation of capital from Cambodia.
  2. After the location is selected, and due diligence done, a deposit of 10% is paid.
  3. Submission of the purchase to the district office of the Ministry of Land Management, Urban Planning & Construction(MLMUPC), or known as the Cadastral Office. The buyer and seller have to go to the Cadastral Office to get the documents prepared and signed. The seller has to present the original title certificate to the Khan at the time of signing the deed to allow the inserting of the new owners name into the title deed. 10% payment is normally done after this. The preparation of documents could take about 20 to 30 days.
  4. The payment of the transfer tax is done at the General Department of Taxation. This process takes about 1 day.  If there is not hard title to the land, normally there is no transfer tax to be paid.
  5. After the taxes are paid, the buyers and sellers return to Cadastral Office to sign a buying/selling form witnessed by a local authority such as a commune chief. The payment receipt of the transfer tax is needed for this process. This normally takes about 5 days.
  6. The Cadastral Office will forward all the documents to the Municipal Land Office where it issues the Certificate of title in the new owner’s name. This process takes about 5 to 21 days, depending on the officials involved. This is normally when the buyer pays 80% of the payment.

Selling procedure

  1. You can advertise to sell your property or you can engage a property agent to find a buyer.
  2. Once a buyer is found, the buyer will give you a 10% deposit.
  3. You will need to go to the MLMUPC to get the documents prepared and signed. The original title deed has to be provided to the MLMUPC. This normally takes about 20 days. The buyer prepares 10% of the amount to be paid to the seller.
  4. Once the buyer paid the transfer taxes, you will be informed to return to MLMUPC to sign a buying/selling property form witnessed by a local authority. This normally takes about 5 days.
  5. MLMUPC will forward the documents to the Municipal office where a Certificate of title in the new owners name will be registered. This normally takes about 5 to 21 days. The buyer normally pays the balance 80%.

Taxes

Buying

  1. Verification of the title certificate KHR 50,000
  2. Buying of certification of incorporation of the seller’s company KHR80,000

Holding

  1. 14% withholding tax on rental income for foreigners

Selling

  1. Real estate agent fee of 3%
  2. Registration and preparation of the documents for transfer of title KHR600,000
  3. Transfer tax of 4% of property selling price.
  4. Stamp duty of KHR 5000
  5. Any capital gains is considered income and subjected to an income tax of 20%