Stamp duty is exempted for less than 70,000 US dollars, Real estate kicked off the

The Cambodian government recently announced that in 2021, stamp duty will be exempted for people who purchase properties below US$70,000.

In 2020, the world is ruined by new epidemic (COVID-19). There is also no exception for Cambodia, all lives have been affected in different images.

According to Changyong Rhee, director of the IMF’s Asia Pacific Department, Cambodia’s GDP growth rate is expected to be negative 1.5% in 2020. He said that in 2020, the Asian economy will experience negative growth for the first time in nearly 60 years, mainly due to the impact of the COVID-19 crisis.

(Source: Internet)

Therefore, in order to alleviate the crisis brought by COVID-19 epidemic and the economic pressure of the general public, the Cambodian government announced its decision on December 23 to exempt the stamp duty on purchases of less than US$70,000 in 2021. At the same time, the capital gains tax was postponed to 2022 which implemented at the beginning of the year.

Real estate took the lead in kicking off the "rescue market" , What is the property market in Cambodia in 2021?

As early as February this year, in response to the impact of the epidemic on the construction and real estate industries, Prime Minister Hun Sen ordered the exemption of real estate stamp duty under US$70,000 from February 2020 to January 2021. However, the global economy will decline sharply in the first half of this year, and it will not start to improve until the second half of this year. This will double the pressure on Cambodia. As the Cambodian economy, which is highly dependent on foreign capital, it will be difficult to recover in a short time. In recently, the Cambodian government announced that it will exempt people who purchase house under $70,000 from stamp duty in 2021.

(Source: Internet)

At the same time, it also issued an announcement stating that the Royal Government has decided to postpone of capital gains tax for another year, which will be officially implemented on January 1, 2022. The capital gains tax collection time was postponed again. It was originally planned to be officially implemented on July 1, 2020, but due to irresistible factors, it was postponed to January 1, 2021. Now it has been postponed again to 2022.

The delay in capital gains tax will further stabilize investor confidence and promote the development of the real estate industry.

The Cambodian government also calls on all real estate developers to work together with the Royal Government to reduce housing prices as much as possible to stimulate the recovery of the social economy after the epidemic.

Chrek Soknim, president of the Cambodian Valuers and Estate Agents Association (CVEA), said that the intervention of the Royal Government has greatly helped the real estate industry affected by the epidemic, and also encouraged owners to buy and sell real estate during the crisis.

The government has actively rescued the market, and developers have reduced prices to make profits. For home buyers, the cost of buying a house will be reduced and the purchase of houses will usher in multiple benefits. This will be a good time to buy a house.

Details of taxes and fees to be paid at all transactions of Cambodian real estate

1.      Purchase stage:

Name change fee: The name can be changed once before the hard title is processed, and the cost is 500-1000 US dollars.

Attorney's fee/notarization fee: paid by the buyer, about US$300-500.

2.      Holding stage:

Housing transaction tax: also known as registration tax, stamp tax, deed tax, transfer tax, all housing transactions need to be paid, the amount is 4% of the total housing price, a one-time payment.  This tax is for the transfer of hard title. Only houses with hard title property rights will be charged, while houses with soft title property rights do not need to be paid.

Property tax: also known as property tax and real estate tax. After the house is delivered, 0.1% of the total value of the house is paid to the Ministry of Economy and Finance. The value is not the market price. The Ministry of Economy and Finance will evaluate the property based on the type of house, area, floor, and construction age.

Real estate tax = (tax base*80%-$25,000)*0.1%

The policy was released in May 2011. Landlords or homeowners are obliged to pay taxes on properties worth more than 100 million riel (approximately US$25,000). The tax rate is 0.1%, and the tax is paid once a year.

Lease tax: also called rent income tax. If a house is bought and rented, it needs to be paid. Cambodian natives or resident foreigners (live more than 182 days) pay 10% of rental income tax; non-resident foreigners (less than 182 days) pay 14% of rental income tax and pay monthly.