Cambodia has undergo drastic changes from an underdeveloped nation to a widely urbanized Kingdom with massive developments and improvements in Manufacturing, Real Estate, Tourism, Banking and Agriculture sectors. In fact, Cambodia has one of the fastest GDP growth in South-East Asia averaging 7% per year, and tourism has also hit record high of around 5 million tourists for the first 10 months of 2017, a 10 percent increase in foreign visitors from the same period in 2016 with tourists mainly from Asian countries.
Cambodia also has close ties with China and will be part of China’s One Belt One Road Initiative that will bring in massive investments into improving its infrastructure and aids in its vision to becoming a middle-income country by 2030.
In terms of its property market, Cambodia has been hailed as one of South East East best property investment destinations. It is supported by Strong Economic Growth, Increasing Local and Foreign Direct Investments (FDI), a Rising Middle Class, Abundant of Strong and Young Workforce and Political Stability. The Cambodia property market demand and price has undoubtedly picked up strongly. Yet the Cambodia Property Tax still remains low and this creates a window of opportunity for investors who are looking for first mover advantage with High Capital Growth and Rental Yield. Foreigners are allowed to own properties in Cambodia on Freehold Basis and up to a max cap of 70% quota of any Condominium Developments.
Overview of Cambodia Property Tax
We will be looking at some of the property taxes that investors are liable to pay when they invest in Cambodia Property.
Transfer tax is equivalent to Stamp duty tax in Singapore context. Total transfer tax is 4% of the property value and it is only payable upon the completion of the property and at the point of application of “Hard Title” Ownership.
Rental tax/Income tax
Under Cambodian tax laws, rental income will be subject to 10% withholding tax if paid locally and 14% if remitted out of Cambodia.
Cambodia property tax
Property tax is 0.1% of Assessment Value per annum. The value is determined by Immovable Property Assessment Committee.
Capital Gain Tax
Currently there is no capital gain tax imposed to individual, however if you are buying under company’s name 20% capital gain tax is payable upon selling your property.
|Classification of Tax||How much you need to pay||When you need to pay|
|Transfer Tax||4% of Purchase Price||On Completion Date and at the Point of Hard Title Application|
|Rental Income Tax||10-14%||Annually|
|Property Tax||0.1% of Assessed Value||Annually|
|Capital Gain Tax||0% Under Individual
20% Under Company
|During the Sale of the Property|
In relative, if you looking at the above taxes, you will realize that at this point in time, the property tax in Cambodia are still very investor-friendly. Indicative Gross Residential Rental Yield can be as high as 8% whereas Indicative Gross Commercial Rental Yield can be as high as 10%. This presents a window opportunity for investors who are looking to Buy Property in Cambodia for first mover advantage with High Capital Growth and Rental Yield.
It is important to note the Property Tax in Cambodia as it will affect the net return on your investments. Besides The Property Tax, it is also important to identify developments in Good Location and offers a Good Return on your investments. The Peak Cambodia and The Bridge Cambodia – a Joint Venture by Singapore Listed Developer, Oxley International and One of the largest Cambodia Real Estate Developer – Worldbridge Land offers Good Guaranteed Rental Returns and they are located in the one of the most prime district in Phnom Penh City Centre.
Hope you enjoy reading this post on – “Cambodia Property Tax?”
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Disclaimer: This article is meant for research/ information and educational purposes only. All information, especially property ownership laws, are subjected to changes and no responsibility shall be held on the accuracy. All sorts of property investments can be risky and investors are expected to perform their own due diligence before committing into any purchase.
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