Property taxes in Cambodia has divided into four main categories: property taxes, vacant land taxes (unused land), property transfer taxes, and rental taxes. Therefore, as a seller, buyer, and property owner, you should learn more about these taxes as basic knowledge to avoid unnecessary costs and penalties. Let’s check the concise as follows.
First, the tax on unused land or on vacant, which was applied in 1995, is limited to unoccupied residential land and abandoned construction land. In cities and regions designated by the Land Assessment Commission, the tax is set at 2% of the market value of the land per square meter.
Then the Property tax refers to the tax on land, houses, buildings, or other structures built on land located in a specific location in an urban area. This tax has been in force since 2011 with a tax rate of 0.1 percent worth more than 100 million riels or equivalent to 25,000 US dollars. The market value of the assets is assessed by the Real Estate Appraisal Commission under the Ministry of Economy and Finance.
However, some types of real estate are exempt: agricultural land, state land, public infrastructure, industrial real estate in special economic zones, and buildings under construction (less than 80%) that have not yet been used.
Next, there is the Stamp tax (property transfer tax). The stamp duty is set at 4% by the Property Appraisal Commission based on the market value of the sale and transfer of ownership of the property. This tax is usually the buyer’s obligation but can be changed depending on the contract of sale, and the taxpayer must pay it within 3 months after the transfer.
Finally, we come to the last one, it’s the Property Rental Tax applies to Cambodians and foreigners who own a rental property but are subject to different withholding tax rates. Cambodians are required to pay a 10% withholding tax, while foreigners are required to pay a 14% withholding tax on their annual rental income.
In conclusion, there are four types of tax you may be involved in the property investment or just rent or buy the assets simply in Cambodia. The above information about tax is very basic for local people and as well as foreigners or investors who are interesting in real estate investment in Cambodia to plan out their financial plan carefully to do such kind of business.
