Planning to invest in property and real estate in Cambodia? If yes then this blog might be of great interest to you as in this blog we are going to provide light on some of the very important real estate rules in Cambodia which you must know and understand before making any investment in this booming Cambodia real estate market.
So without wasting much of the time, let’s jump straight to our points of discussion. i.e. Important real estate rules in Cambodia for 2022
Cambodia Real Estate Rules for 2022
#1 Rules for a foriegn buyer
Cambodia is the most friendly country in southeast asia when it comes to allowing foreigners to invest in Cambodia real estate but the rules are a bit tricky, as a foreigner you can not buy a property on the ground floor. Rather, Cambodian real estate rules allow foreigners to own strata titles of flat/apartment or condominium under their own name.
Note that the foreigners are not allowed to buy land or shops, which means you can’t hold a strata title for lands and shops under your own name. Though you can indirectly own these properties by setting up a nominee agreement with a Cambodian citizen or a company holding a real estate in Cambodia. Below given are some ways in which a foreigner can own a land property in Cambodia.
- Leasing a property under a long term contract with natural persons or legal entities of Khmer nationality.
- Forming a LHC (Land holding company) with a joint venture and holding minority stakes.
- Marrying a Cambodian – Marrying a Cambodian citizen makes an individual eligible to become a nominee of the land owner.
#2 Cambodia real estate age restrictions
Cambodia real estate can be owned by male and females of any age, however, before 18 years of age there should be a nominated guardian of the owner.
#3 Cambodia real estate tax rules
When it comes about property and real estate in Cambodia, the taxes are very low and often non-payable. The Cambodian government charges a tax of 0.1% of property’s current market value, annually(if the value is less than $25000).
Additionally there is a tax of 10% for Cambodian residents and 14% for non-residents on real-estate rental income. Means if you own a property and you have rented it to a tenant, you have to pay 10% of the rent your tenant gives you to the govt.
#4 Property title rules for Cambodia real estate – Hard vs Soft titles
Cambodia real estate market distinguishes the property rights into two types of titles; hard titles and soft titles. The basic difference between the two is that ‘hard titles’ are registered under the national government and soft titles are issued by local land registry authority.
According to the Cambodia real estate rules hard titles provide an owner with indisputable right of the property and soft titles on the other hand are a bit less authoritative. Despite this fact, soft title also provides the owner with 100% ownership and 90% of the Cambodian locals have soft titled registration properties. Lower registration fees and less queue time also contributes to the fact that Cambodia real estate is thriving on soft titles only.
#5 Property Inheritance Rules
Inheriting a property in Cambodia is quite similar to doing the same in any other to any other country and different rules and procedures are applicable for various conditions, given below:
- Inheriting by will
- Default Inheritance without a will, According to the rules, the property will be transferred legally to the biological children or the adopted childs if any. Ofcourse, the adoption must be on paper.
- Succession order for property inheritance is as Children (Biological and adopted > Ancestors > Siblings > Spouse
- Foreigners are eligible to inherit properties in Cambodia. If it’s pre-written in the will of the attorney.
#6 Land Concession Rules for Cambodia real estate
Land concessions are legally valid rights granted through a legal document that is issued at the discretion of the relevant authority, granting anyone who is a natural or legal entity or group of individuals to be able to use a property and to exercise the rights provided in this document.
Land concessions in Cambodia are divided into 3 types, as follow:
- Social Concessions: Beneficiary can build residential or cultivate the lands of state
- Economic Concessions: Beneficiaries can clear and use the land for industrial and agricultural purposes
- Development or Exploitation Concessions: Beneficiaries can use the land for mining, ports, airports etc
This brings us to the end of our list of the most important rules for Cambodia real estate investments. When it comes to knowing the legalities and audit the property on legal terms, you must consult a real-estate agent or agency to keep your worries aside and focus on your reason for owning a Cambodia real-estate property.