Cambodia Real Estate Property Buying Guide

Cambodia offers tempting business opportunities to investors, but the state has applied strict laws for foreign investment, preventing foreigners from owning their lands in the county. IPS Cambodia helps foreigners claim their legal ownership of Cambodian lands, facilitating the process with tailored beneficial deals according to the client’s requirements.

Recent development in Cambodia has led to the country’s tremendous economic growth, marking an unparalleled rise in the nation’s property sectors. So, if you’re looking forward to investing in any frontier markets in Asia, Cambodia is the best and most open option for all business owners or real estate buyers.

This small country is known as the heart of Southeast Asia and is the only closest option for the recession-proof country, making it the hit highlight under the radar of investors.

But the country also states strict laws for foreigners, making it difficult for them to invest in the Cambodian property or land. Therefore, it is essential to know all the details of Cambodia’s rental and property laws before venturing into the real estate market.

IPS is the largest classified portal for Cambodian real estate purchases that further helps you with all the legal procedures and regulations, facilitating your real estate investment for beneficial deals.

Why Is it difficult for foreigners to invest in Cambodia’s Real Estate?

Foreigners in Cambodia are only eligible to get freehold ownership of strata-titled properties, mostly condos. Under Article 44 of their constitution, foreigners cannot purchase their land, just like Thailand, the Philippines, Vietnam, and other countries.

According to Amended Law on Investment- Article 16 of the constitution, only Cambodian entities or Cambodian citizenship only have the legal right to own land.

Apart from all these laws and regulations, four legal ways can help foreigners establish their land in the country. These are:

  • Land can be leased,
  • Land can be purchased through a local vendor or a company established in Cambodia.
  • Land can also be purchased through a Cambodian nominee, but this method is unsafe according to Cambodian laws.
  • Foreigners can apply for Cambodian citizenship and legally own their land in the country.

Is it Safe to Buy Land in Cambodia with the help of a Cambodian Nominee?

With so many restrictions for foreigners to own their land in Cambodia, buying it with the help of a Cambodian nominee can be considered an option, but this has been ruled out by the government, marking it unsafe due to several legal reasons.

  • In this option, there are chances that government officials might confiscate your land or force you to sell the same.
  • The other possible chances are that the nominee might claim 100% ownership of the land or may run away from this contract.

These scenarios might have some troublesome factors for the foreigners where they don’t know what will happen later on.

Cambodian Land Titles:

Cambodian growing business and economic opportunities might seem tempting from the outside, but the reality is slightly different. Long procedures cumulate the formalities, and investors might face difficulties completing them. Therefore, they must know all the factors before investing in any property options.

According to Cambodian laws and regulations, there are different titles for the land:

1.    Soft Title:

Soft Title is issued by the local chief village officials, and these are based on the rights of possession. More than 70% of the land is owned under this title in Cambodia.

2.    Hard Title:

Hard Titles are based on the possessory rights registered with the national land office. These are increasingly available for foreign investments, providing complete information about the property and its previous ownerships.

3.    Strata Title:

Strata titles are a beneficial option for condos. Under this, the land or the units are owned on a freehold basis, and owners can also build common areas like swimming pools, gyms etc., on their land.

4.    LMAP:

Land Management and Administration Projects (LMAP) is considered the safest method. Under this, the country will help overcome the issues of land grabbing and involuntary eviction as all the properties are registered with the world bank and protected from local property owners.

Foreign investors who wish to purchase their land in the country cannot legally get the same registered under the soft or hard title. They can only claim their ownership over the same through strata titles.

Details about Property Tax in Cambodia:

Annual land taxes in Cambodia are too low and usually are not payable. They are charged at 0.1% on the total property market value of more than $25,000. Cambodian law encourages people to use their spare or unused land by charging extra tax up upto 2% on the property’s market price.

Rental taxes for the country are quite higher, increasing upto 10% for the Cambodian residents. All the non-residents of the country who still do not own their citizenship need to bear a 14% annual land tax. There are various deductions on these taxes that can be applied to lower the rate, but a resident needs to have complete information before applying it.

Why Do You Need to Hire Real Estate Agents in Cambodia?

Buying your land, as already discussed, is not an easy task in Cambodia, especially for foreigners. Many rules and regulations in the Cambodian constitution bound them from legal purchases.

Therefore, hiring or connecting with a real estate agent is necessary for all newcomers or existing investors. This will help them find the best deal in their budget and simplify all the legal formalities included in the process.

IPS Cambodia is ranked as the best-classified portal, offering the best options for residential and commercial spaces since 2009. The relators will assist you throughout the formalities, making it easier for foreign investors to purchase their land.



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