Property Tax in Cambodia
Property tax in Cambodia is essential for foreigners who want to purchase property in Cambodia. Existing laws have changed as time passes and have become more thorough—to ensure a risk-free purchase, contact the up-to-date real estate experts at Knight Frank Cambodia.
Overview
- What currencies are used in Cambodia?
- What property is taxed in Cambodia?
- When must property taxes be paid in Cambodia?
- How is property tax paid in Cambodia?
- How is property tax calculated?
- Sample calculation for property tax
- What is the property transfer tax?
- Sample calculations for property transfer tax
- What is the tax for unused land?
- What is the taxation for property rentals?
- Sample calculations for property rentals
- What is capital gains tax?
- Conclusion
1. What currencies are used in Cambodia?
Two currencies are used in Cambodia, the Khmer Riel (KHR) and the American dollar ($).
2. What property is taxed in Cambodia?
Property tax in Cambodia is officially known as the Tax on Immovable Properties (TOIP). Immovable properties include: land, houses, infrastructure, buildings, other construction, etc. TOIP imposes an annual tax rate of 0.1% on immovable properties that value over $25,000 (KHR 100 million).
Properties under this value, as well as state-owned lands, agricultural land and industrial land, are exempt from paying Cambodia’s property tax. The value of all property built on land is identified by its market price, which is evaluated and then established by the Prakas of the Minster of Economy and Finance
3. When must property taxes be paid in Cambodia?
Property taxes must be paid annually, no later than the 30th of September.
4. How is property tax paid in Cambodia?
Taxpayers can pay at their local tax office or though banks such as ACLEDA Bank, Canadia Bank, Vattanac Bank or Cambodia Public Bank.
If the property is registered, taxpayers will need to provide their Property Tax Registration ID, or the tax payment receipt of the previous year. As for unregistered properties, its essential the taxpayer quickly contacts the local tax office of said property and registers the property.
A new registration requires:
– Tax Form PT01: a form that is issued by the General Department of Taxation (GDT), which inquires the property’s specifics.
– Tax Form PT02: a form that is issued by the General Department of Taxation (GDT), which is a tax application form.
– Property owner’s National ID Card, Birth Certificate or Passport
– Residence book/family book/residency letter
These are the general documents needed, but other documents might be involved depending on the property and transaction.
5. How is property tax calculated?
Property tax is calculated by using 80% of the tax base, deducting $25,000, then calculating 1% of the total. The tax base is evaluated and established by the Prakas of the Minister of Economy and Finance. And the $25,000 is the property valued under said amount that is exempt from paying property tax.
The property tax formula is as follows:
Property Tax = ((Tax Base)*80%)-$25,000)*0.1%
6. Sample calculation for property tax
Prices of property is dependent on the land and building price per square meter, as well as its location.
The tax base is the price per square meter for particular property types, which has been established by the Ministry of Economy and Finance. The table for tax base (as of 2018) of properties in the districts of Daun Penh, Chamkarmon, 7 Makara and Toul Kork is as follows:
| Building Type | Age within 10 years (USD/sqm) | Age over ten years (USD/sqm) | ||||
|---|---|---|---|---|---|---|
| Reinforced concrete framework | Semi-permanent structure | Condo | Reinforced concrete framework | Semi-permanent structure | Condo | |
| Basement | $200 | $200 | $200 | $180 | $180 | $180 |
| Ground Floor (E0) | $250 | $120 | $600 | $200 | $100 | $500 |
| First Floor (E1) | $200 | $100 | $600 | $150 | $80 | $500 |
| Second to Fifth Floor (E2-E5) | $150 | $80 | $600 | $100 | $60 | $500 |
| Sixth to Tenth Floor (E6-E10) | $700 | $700 | $700 | $600 | $600 | $600 |
| Eleventh floor onwards (E11-) | $800 | $800 | $800 | $700 | $700 | $700 |
In this sample calculation, Owner A has a reinforced concrete structure apartment building:
– with a total of 4 floors located in Toul Kork district
– that is less than 10 years old
– that has a property size of 30 x 40 m
– where each floor is 15 x 20 m
– where the land price is $1700 per square meter
Using the information from the table above for a reinforced concrete structure, the property tax for Owner A’s apartment building can be calculated:
| Land price | 30m x 40m x $1700 | $2,040,000 |
| Ground floor (E0) | 15m x 20m x $250 | $75,000 |
| First floor (E1) | 15m x 20m x $200 | $60,000 |
| Second floor (E2) | 15m x 20m x $150 | $45,000 |
| Third floor (E3) | 15m x 20m x $150 | $45,000 |
| Total price (tax base) | $2,265,000 | |
| Property Tax = ((Tax Base)*80%)-$25,000)*0.1% Property Tax = (($2,265,000)*80%)-$25,000)*0.1% Property Tax = ($1,812,000-$25,000)*0.1% Property Tax = $1,787,000*0.1% Property Tax = $1,787 | ||
A total of $1,787 of property tax must be paid annually by Owner A for a reinforced concrete structure 4-storey apartment building.
* Please note that this is ONLY a sample calculation.
7. What is the property transfer tax?
Transfer taxation, also known as registration tax or stamp duty, is a 4% tax imposed when there is a transfer of ownership for immovable property. Taxpayers must pay this transfer tax within three months of the property transfer. It is generally paid by the buyer, but is negotiable depending on the contract between both parties.
Properties receiving ownership by the government and direct kin/relatives are exempt from the 4% transfer taxation. Its calculation is as follows:
Property transfer tax = (tax base*0.4%)
8. Sample calculations for property transfer tax
| *Tax base according to the example calculation in Section 6 will be used |
|---|
| Property transfer tax = (tax base*0.4%) Propery transfer tax = $2,265,000*0.4% Property transfer tax = $9,060 |
The property transfer tax Owner A must pay to transfer the ownership of their 4-storey apartment is $9,060.
9. What is the tax for unused land?
Unused land includes non-constructed land and vacant constructed land determined by the Unused Land Appraisal Committee (ULAC). The owner of the unused land is taxed at a 2% rate on the tax base, and is not categorised under the scope of Tax on Immovable Properties.
10. What is the taxation for property rentals?
Rental properties, whether the landlord be a Cambodian national or non-resident, must pay an annual rental tax. Cambodian nationals have a 10% tax rate, whereas non-residents have a 14% tax rate. The tax rate is equivalent to 10% or 14% of the gross rental, which is included in the lease agreement for the rented property. The formula would be:
Rental Tax for Cambodian nationals = (rent price per unit *number of units)*10%
Rental Tax for non-residents = (rent price per unit*number of units)*14%
11. Sample calculations for property rental
| Cambodian National Calculation Example: 5 Unit Apartment Complex, Rent per unit is $800 (monthly) | |
|---|---|
| Rental (monthly) | $800 |
| Rental (annually) | Annual rent = $800*12 Annual rent = $9,600 |
| Number of units | 5 |
| Annual rental tax (10%) | Rental Tax for Cambodian nationals = (rent price per unit*number of units)*10% Rental tax for Cambodian nationals = ($9600*5)*10% Rental tax for Cambodian nationals = $4,800 |
An annual rental tax of $4,800 must be paid by the landlord, if they are a Cambodian national, for a 5 unit apartment complex that is $800 per unit (monthly).
| Non-resident Calculation Example: 5 Unit Apartment Complex, Rent per unit is $800 (monthly) | |
|---|---|
| Rental (monthly) | $800 |
| Rental (annually) | Annual rent = $800*12 Annual rent = $9,600 |
| Number of units | 5 |
| Annual rental tax (14%) | Rental Tax for non-residents= (rent price per unit*number of units)*14% Rental tax for non-residents = ($9600*5)*14% Rental tax for non-residents = $6,720 |
An annual rental tax of $6,720 must be paid by the landlord, if they are a non-resident, for a 5 unit apartment complex that is $800 per unit (monthly).
12. What is capital gains tax?
Initially introduced in April of 2020, Capital gains tax is a flat rate of 20%. The unfortunate events caused by COVID-19 has delayed its implementation from July 2020 to January 2022. Capital gains tax applies to individuals who have the intention of selling immovable property.
13. Conclusion
All this knowledge is vital when purchasing property in Cambodia, for both locals and foreigners. But to ensure your property purchase is risk-free and smooth, the experts at Knight Frank Cambodia are happy to be at your service. Contact us to learn more.
Source: https://www.knightfrank.com.kh/guides/property-tax-in-cambodia