Property Taxes in Cambodia for Foreigners & the Rules & Regulations for Investing in Cambodia
Since Cambodia opened its door to foreign investors in 2010, we have seen this exciting country in South East Asia experienced drastic changes, from an underdeveloped nation to a competitive country with massive developments, ranging from Real Estate, Banking, Tourism, Manufacturing and etc. Cambodia is experiencing one of the fastest GDB growth in South East Asia (World 3rd fastest) averaging 7% per annum.
Given its strategic location, Cambodia nation plays an important role in China’s One Belt One Road Initiative. Over the past few years, we have seen massive investment in this country, from infrastructure like building expressway, to construction of public transport like railway, this country is aiming to become a middle-income country by 2030.
Given its promising outlook, over the past 3-5 years, more and more international investors has invested in real estate in Cambodia, especially the capital – Phnom Penh. Given its strong economic growth, and the population pyramid where majority are young workforce in their 20s to 30s, this drive up the local demand of housing too.
Cambodia has been an investor-friendly nation, especially when come to the property tax. Cambodia property tax remain relatively low compared to other South East Asia Nations, offering investors an opportunity to enjoy the first mover advantage. Foreigners are allowed to own Freehold properties in Cambodia with up to 70% quota in a single development.
There are different taxes involve when comes to property investment :
Transfer tax (Stamp Duty)
Commonly known as stamp duty. The transfer tax in Cambodia is 4% of the property value and it is payable upon completion of the development, at the point of application of “Hard Title” Ownership
Rental Tax/Income Tax
Under Cambodia Law, rental income will be subject to 10% withholding tax if paid locally and 14% if remitted out of Cambodia
Cambodia Property Tax
Property tax is 0.1% of the Assessment Value per annum. The value is determined by Immovable Property Assessment Committee.
Capital Gain Tax
There’s no capital gain tax imposed if purchasing under individual name. However, if under company name there’s 20% capital gain tax upon selling the property
If comparing the taxes in Cambodia, many investors realise it’s relatively attractive, especially the gross rental yield in Cambodia ranging from 8-10% per annum. This offers the investors an opportunity to enter into an emerging country at the early stage at attractive pricing.
The main concern that most investors have when come to overseas investment will be the hassle of managing it. Thus it is not surprising to see the 2 developments jointly developed by Singapore listed developer, Oxley International Holdings & one of the largest Cambodia Real Estate Developer – Worldbridge Land The Peak & The Bridge (Fully Sold) is very popular in demand. The Bridge (First Project) has been fully sold and the 2nd development The Peak is about 90% Sold (Expected to be completed in late 2020)
Disclaimer : This article is meant for research and educational purposes only. All informations on property ownership laws, are subject to changes by local authority from time to time and no responsibility shall be held on the accuracy.
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