Cambodian government announced the exemption of stamp duty until the end of 2024

On April 17, the Ministry of Finance and Economics of Cambodia released the latest policy measures to promote the development of Borey construction and real estate.

The instruction pointed out that although Cambodia's social and economic activities have been fully restarted, there are still uncertainties in the global economic and financial situation. The stable development of the real estate industry is crucial to Cambodia's economic development. Therefore, the Cambodian government has introduced incentives to help the Borey communities and real estate development develop more stably.

These measures mainly include tax payment, tax reduction and exemption:

1.Postpone the phased implementation of the tax payment plan for residential complex (Borey) development companies licensed by the Real Estate Business & Pawnshop Regulator until the end of 2024.

2.Increased the tax deadline from 12 months to 18 months for Borey developers paying less than $1 million in taxes. As for Borey developers paying more than $1 million, the tax deadline has been increased from 24 months to 36 months.

3.Postpone the implementation of the capital gains tax for the real estate industry until the end of 2024.

4.Extended stamp duty exemption on the transfer of ownership or possession of Borey houses with a total price of less than or equal to $70,000 until the end of 2024

The meaning of “Borey”

Those who are not familiar with the Cambodian real estate market may not know with meaning of "Borey".

Originally, the word “Borey” referred to a town or city in Khmer language, but the word has evolved and now“ Borey” refers to a gated residential complex.

Usually, Borey communities include mid-to-high-end products such as townhouses, shophouses, link villa, and single villas. Some large Borey communities also include schools, clinics, markets, shopping centers, swimming pools, tennis courts, parks and leisure facilities, etc. .

How is stamp duty calculated?

Stamp duty in Cambodia is a tax levied on the sale & purchase of real estate, the transfer of real estate property rights, and the issuance and receipt of corresponding real estate title certificates.

+Taxpayers and Tax Rates

The taxpayer is usually the person who owns the property, i.e. the purchaser, but also negotiable. The tax rate is 4% of the value of the property transferred or taken into possession. Furthermore, where the real estate to be transferred or occupied is a building under construction, land, or real estate shares of a enterprises, the taxpayer must pay within three months after the transfer of ownership.

+Tax base calculation

The taxable base value of stamp duty on immovable property is determined by the Valuation Committee based on market value.

Example: Mr. A buys a 600 sqm. land at price $200/sqm. The Valuation Committee has assessed a reserve price of $150/sqm. Calculate the amount of this stamp duty:

Land Price: $150 x 600 = $90,000

Stamp duty: 90,000 x 4% = $3,600

+Tax relief policy

Transfer of inheritance methods: between husband and wife, between grandparents and grandchildren, between parents and children;

First donation between relatives mentioned above;

Economic or social land concessions for economic victims to build housing or family agricultural industries;

Real estate registered as a national agency such as a foreign embassy or consulate, or an international organization, or a government technical cooperation agency.

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