Ownership in Cambodia of foreign property

Cambodia has a freehold land ownership system for its citizens unlike its three neighboring counterparts. Externals based in Cambodia may, subject to 2010 law on the provision of ownership rights, also have ownership rights over certain properties. However, these rights are limited to buildings with a 'strata' title available only to newly built apartment buildings.

The Title Regulation states that foreigners cannot legally acquire a basement unit, and any allocation of foreign ownership shall be limited to a maximum of 70% of the units at a single building. Nevertheless, a foreigner lease term over landed properties can still be up to a 50 year maximum, with a 50 year renewal option included.

Tell me more about Cambodian Land Titles?

Title Categories Explained in Cambodia, Once and For Everyone! Cambodian land ratings may be rather confusing for the new purchaser. In Cambodia, let us explore three main ways of securing property possessions, and the main misunderstandings about ownership of Cambodian property and land titles in Cambodia.

From 1975 to 1979 all records of land titles in Cambodia were destroyed. This made it almost impossible to prove ownership after the war. A cambodian land law was passed in 1989, and a revised version entitled private land ownership was published in 2001. The Land Law of 2001 created the land registry system for Cambodia, which continues today.

Since then, Cambodians have received more than two million land titles from Cambodia. Hard title, soft title, and private property ownership of co-owned buildings – also known as Strata Title – can now be secured by one of three forms of land titles for Cambodia. Furthermore, there is a very safe title for the LMAP.

1- Hard Title

- Hard title is the strongest form of property ownership in Cambodia and the best Cambodian Land Title.

- Hard titles are an ownership certificate provided by the national Land Management and Planning office.

- Hard titles contain detailed information that has been duly recognized and certified at a national level with the Ministry of Land and a cadastral office.

- A Transfer tax of four percent applies when a hard title transaction occurs.

2- Soft Title

- Soft title is the most common form of ownership and the most commonly issued Cambodia land title.

- It is a Cambodian land title that is recognized at the local government level.

- Soft titles are provided by the local Sangkat or District office and are not registered at a national level – but are still considered a possessory status.

- The majority of property transactions still occur with soft titles to avoid ownership transfer taxes and fees.

- However, most new major development projects are being transacted with hard titles as these are the most durable Cambodia land title.

Check another useful blog post on Realestate.com.kh relevant to Cambodia land titles: “Pitfalls for Foreign Property Ownership in Cambodia.”

3- Private Ownership

- Private Ownership in Co-owned Buildings is the most recent form of ownership and allows foreigners to legally own property in Cambodia.

- This is more commonly known as a Strata Title.

- Strata Title is a less common Cambodia land title, but numbers are growing fast.

- The ‘Law on Foreign Ownership’ was promulgated on 24 May, 2010.

- This law limits foreign ownership to co-owned buildings. Foreigners still cannot own land, as it is

- Co-owned buildings are defined as a building or construction in which several owners reside, consisting of some parts that are the exclusive ownership of each co-owner (private units) and some other parts that are common spaces for the common use of co-owners (common areas).

- Strata title has also recently been extended to commercial buildings, and in particular shared office complexes.

- Learn more about the strata title process here.

4- Land Management and Administration Project or LMAP Title*

- A titling system called LMAP (Land Management and Administration Project) has been introduced in Cambodia by the World Bank to improve land tenure security by the Ministry of Land Management Urban Planning and Construction.

- Under the scheme, GPS coordinates are being registered for all land plots in the country.

- If you have an LMAP title already, the borders have been agreed between neighboring parties so all border disputes have been resolved.

- This is the safest type of title.

Ownership of foreign property in Cambodia may not be straightforward. Take always care, take time, and soon you will gain foreign property ownership and a valuable asset in Cambodia. Compass.com.kh recommends that you provide legal support when you consider lease in Cambodia as a foreigner to be clear about all these issues and more.

#Applicable Strata Title Fees and Taxes

The conversion of a hard title in a strata title is charged to the public service. For each individual strata title transferred to a purchaser, there is also a public service charge. A transfer tax shall also apply when a strata title is transferred. Once the certified document set is reviewed and accepted by the Land Management Ministry, the General Taxation Department shall be provided with the exact same documentation with a few supplementary documents.

Tax authorities are here to issue an appraisal of the amount of the transfer tax payable. Transfer tax is based on a rate of 4% of the value of the condominium. The price to be taken into account when 4 percent is used, or the value of a condo using the prescribed rates issued by the Minister of Economy and Finance, is more high between the considerations paid for the Condominium in the underlying sale and purchase agreement.

The Ministry of Land Management will finalize the title transfer once tax payment is approved by the General Taxation Department. For the final transfer to be approved, the buyer and the developer must be present in the Ministry of Land Management. For the final processing and transfer of the strata titles after they are eligible for distribution, off-plan buyers must therefore return to Cambodia.

Source : Compass Original