Although it has been a long time since the outbreak of Covid-19, there are still some negative impacts on the real estate industry in countries around the world, including Cambodia. Therefore, the royal government of Cambodia has been continuously introducing a series of preferential policies to help the development of the industry.
In fact, the Ministry of Economic and Finance has recently announced a new policy to implement stamp duty exemptions for first-time home buyers, aims to reduce the tax burden on homebuyers and promote the development of the real estate industry.
Today Compass will come up with some update of the real estate-related tax information in Cambodia in 2025, as well as the latest exemptions and preferential policies.
Definition
Registration Tax (Stamp Duty) a type of tax levied on the transfer of ownership or possession of a property, a tax payable when buying, selling, exchanging, or donating real estate or placing real estate shares in a company.
Obligee
Typically the last person to own or possess the property, usually the buyer, but both parties can negotiate a contract of sale. The taxpayer is required to submit the declaration and pay the registration tax in full within 3 months after the transfer of rights, in accordance with the established procedure.
Tax rate, Tax base and Tax calculation
The registration tax is determined at a rate of 4% of the tax base, with the tax base being the total property value (land or construction) determined by the Property Appraisal Commission.
+ Tax calculation
With tax incentives
Tax base = total property value - tax incentive
⇒ Tax to be paid = tax base * 4%
Without tax incentive
⇒ Tax to be paid = total property value * 4%
Tax exemption
● Succession between parents and children between husband and wife, between grandparents and grandchildren
● The first donation between the above relatives
● Economic or social land concessions to the poor people for housing or agro-industry or family agriculture
● Real estate registered in the inventory of state institutions of foreign embassies or consulates or international organizations or governmental technical cooperation agencies.
Tax incentives
A/ Transfer of ownership or possession of property in the "relative circle" between parents-in-law and children-in-law or between siblings and siblings
The above cases are allowed to be deducted from the stamp duty base:
Succession: 200,000,000 Riels equal to 8,000,000 Riels in tax
Donation: 100,000,000 Riels equal to 4,000,000 Riels in tax
B/ Donation from the "second time" on the same property in the relatives between parents and children, between husband and wife, between grandparents and grandchildren, from parents to children and spouses (joint property of the couple during marriage) and from grandparents to grandchildren and spouses (joint property of the couple during marriage)
The above case is allowed to be deducted from the stamp duty base of 100,000,000 Riels equal to the tax amount of 4,000,000 Riels.
★The latest Tax Incentives for 2025
According to a press release issued by the Ministry of Economic and Finance, to facilitate citizens who have purchased housing from residential development companies in the form of Borey or condominiums and to further support the real estate sector, the Ministry of Economy and Finance has informed property owners and the public about the exemption and preferential stamp duty on the transfer of ownership or possession of real estate for first-time home buyers. This benefit only applies to real estate priced less than $210,000.
For housing prices over $210,000, the excess amount can be deducted from the tax base by $210,000 and taxed at the normal rate. For properties purchased by non-first-time homebuyers, $70,000 can be deducted from the tax base. These preferential policies will last until the end of 2025.
Definition
Tax on Property (Property Tax) is an annual tax levied on property worth more than 100 million Riels (approx. USD 25,000). The definition of immovable property includes land, houses, buildings, co-owned buildings and other construction.
Obligee
The natural or legal entity whose owner or occupant or final beneficiary of the property. Taxpayers must register with the General Department of Taxation, declare and pay the tax by the due date of 30 September each year.
Tax rate, Tax base and Tax calculation
The property tax is collected annually at the rate of 0.1% on a taxable basis. The tax base is 80% of the total property value (either land value or construction cost) according to the age of the construction and the type of construction determined by the Real Estate Appraisal Commission, minus the amount of 100,000,000 Riels for a property.
+ Tax calculation
⇒ Tax to be paid = tax base * 0.1%
Tax exemption
● Immovable property that has a value less than or equal KHR 100 million
● Immovable property that is catergorised as agricultural land
● Immovable property that is held by the Royal Government of Cambodia and ministries/institutions which is leased to private enterprise for business (with respect to the land),
● Immovable property that is owned/used by any organization/person established exclusively for religious, charitable causes where there is no private interest
● Immovable property that is owned/used by a foreign diplomatic or consular mission, international organization and agencies of technical cooperation of other governments
● Infrastructure such as roads, bridges, fresh water/electricity, airports, ports, railway stations – inclusive of buildings/offices that are directly involved with infrastructure activities.
● Immovable property located in a Special Economic Zone that directly serves agricultural, industrial, and/or service activities
● Immovable propertyaffected by the case of force majeure
House, building or construction that is less than eighty (80%) percent constructed and not in use
★The latest Tax Incentives for 2025
According to the announcement of the Ministry of Economy and Finance on October 9, 2024, property (with or without a title deed) not previously registered and declared for immovable property tax can still be registered and pay taxed starting from the year of possessed or last use. For property that has been registered and for which property tax has been declared but the declaration has been missed for several years is exempt from administrative penalties (i.e., additional tax and interest) until 30 June 2025 (i.e., penalties will apply as from 1 July 2025).
Definition
Unused Land Tax (Tax on Unused Land) is a type of tax levied annually on non-structured land and abandoned land located in cities and in areas determined by the Unused Land Appraisal Committee (ULAC) .
Obligee
The owner of the unused land, occupant or final beneficiary must register with the General Department of Taxation, declare and pay the tax by the due date of 30 September each year for plots of unused land that exceed five (5) hectares in size.
Tax rate, Tax base and Tax calculation
This tax is set at the rate of 2% of the tax base.
The tax base shall be based on the land value as assessed by the ULAC. An owner, occupant or final beneficiary shall be allowed to deduct five (5) hectares from the tax base for each plot of land.
+ Tax calculation
Calculation of tax payable for the period from 2025
⇒ Tax to be paid = (Total area - 5 hectares) * Price of land per square meter * 2%
★The latest Tax Incentives for 2025
Unused Land plots that exceed more than five (5) hectares shall be exempt from TUL in accordance with any of the following conditions:
1-Agricultural Land that is currently cultivated with the approval of the committee or sub-committee of land valuation for TUL.
2-Unused Land that is currently used for the economic activities of a physical person or legal person that has been registered with the GDT.
3-Unused Land, with or without construction, under a lease agreement.
4-Unused Land that is in the possession of the Royal Government or government institutions
5-Unused Land that is the possession of the community
6-Unused Land under economic concession which is leased from the state, or government institutions.
7-State-owned unused land which is leased to any physical person or legal person for economic activity as per an contract/agreement between the two parties.
8-Unused Land in a Special Economic Zone that directly serves agricultural, industrial, and/or service activities
9-Unused Land that has been registered as an asset of an enterprise in the field of education and vocational training serving the educational and vocational training purpose of the enterprise. In case that this land has been sold or does not serve the above purpose, tax obligations shall be fulfilled as per the prevailing laws in force.
Definition
Capital gains tax is a tax on taxable income derived from the sale or transfer of capital of real estate in Cambodia and abroad to a resident natural persons and for capital in the Kingdom of Cambodia to natural persons and non-resident legal entities.The five (5) types of capital gains taxes, including leases, investment assets, goodwill, intellectual property, and foreign currencies
Obligee
A resident or non-resident taxpayer who has sold or transferred capital to another person and a non-resident taxpayer.
Tax rate, Tax base and Tax calculation
The tax is set at a fixed rate of 20%.
The tax base is capital gains, which are taxable income derived from the proceeds from the sale or transfer of capital, minus allowable expenses or costs of assets.
+ Tax calculation
Capital gains tax (real estate) is divided into two categories:
A. Unsaved Costs Deductions
Capital gain = sale or transfer price of real estate - (Sale or transfer price of real estate * 80%)
B. Saved Costs Deductions
Capital gain = sale or transfer price of real estate - (original price of real estate + total related expenses)
⇒ Tax payable = capital gain * 20%
Tax exemption
Capital gains tax is exempted on the sale/transfer of:
● Immovable property owned by a public institution
● Immovable property owned by a diplomatic mission, foreign consul, international organization or technical cooperation agency of other governments;
● The residence which is the principal place of residence for a taxpayer for at least five (5) years prior to the sale/transfer. If the taxpayer has more than one residence or a taxpayer and their spouse have different residences, only one residence shall be permitted as a principal residence,
● The transfer of immovable properties among relatives as stated in the transfer tax regulations, excluding the transfer of ownership or right to occupy immovable properties between biological brothers/sisters, parents-in-law and children-in-law and grandparents-in-law and grandchildren-in-law,
★The latest Tax Incentives for 2025
According to the announcement of the Ministry of Economy and Finance, the implementation of capital gains taxes will be postponed until the end of 2025.
Definition
Tax on Property Rental is levied on the incomes derived from the lease of all types of real estate, such as buildings, houses, land, floating houses, etc.
Obligee
This tax is collected from the property owner. The owner must declare the tax within 15 days from the date of signing the lease.
Note: In case the tenant is a legal entity (enterprise) registered for tax in the self-declaration regime, this income is taxed and repaid according to the general withholding tax rate at the rate of 10% for Cambodia residents and 14% for non-residents.
Tax rate, Tax base and Tax calculation
Tax on Property Rental is applied at the rate of 10% for residents and 14% for non-residents.
The tax base is based on the total gross monthly rent (referring to the price set in the contract or the price agreed between the tenant and the owner)
A security deposit is not included in this gross rental fee.
+ Tax calculation
⇒ Tax to be paid = tax base * 10% or 14%
★The latest Tax Incentives for 2025
Tax exemptions are granted:
● Rental fees from assets of the Royal Government of Cambodia or institutions under the Royal Government of Cambodia.
● Fees from renting assets of foreign diplomatic missions or consulates, international organizations, and other government technical cooperation agencies.
● Fees from renting assets of any organization or association organized and operated for purely religious, charitable, scientific, literary, or educational purposes, with no portion of the fees used for personal benefits.
● Deposits made by the lessee as a guarantee that the owner or right holder must return the full amount to the lessee at the end of the agreement.
● Rental fees that have already been tax deducted by the enterprise as a taxpayer under the real regime, in accordance with Articles 25 and 26 of the Law on Taxation.
● Rental fees from assets of the enterprise as a taxpayer under the real regime already included in the taxable income of the enterprise.
● Rental fees for all rental cases with a total monthly rental amount less than 500,000 Riels.
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