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Understanding property titles in Cambodia
February 24, 2020, 3:42 a.m.
(The Ministry of Land Management, Urban Planning and Construction / Phan Soumy)What is a property title?A title or ‘deed’ is an official document confirming who owns the property, its location, and what rights the property owner enjoys. It should be noted that a significant percentage of land in Cambodia is not registered with the National Land Office and has no official land title certificate to secure the land on behalf of the owner.During the civil war period between 1975 and 1979, all Cambodian land title records were destroyed. This made any definitive proof of property ownership impossible after the war. A land law was passed in 1992 to establish the groundwork for land ownership, but it wasn't until its 2001 revision that allowed private ownership of land in Cambodia. The 2001 Land Law allowed for the creation of a land registry system enabling the issuance of Cambodia land titles. To date, over two million Cambodian land titles have been issued to citizens.Property ownership can now be secured by one of three forms of Cambodia land title: Hard title, Soft title, and Private Ownership in Co-owned Buildings – also known as Strata Title. In addition, an LMAP title is also now available.One of the most frequently asked questions is "Can foreigners own land or landed property in Cambodia?" The quick answer is No. The Cambodian Constitution prohibits foreign nationals from owning land and landed properties in the country.There are, however, indirect mechanisms of "ownership" such as the Nominee structure and Land concessions for development. Visit our guide to Property Ownership Mechanisms for Foreigners in Cambodia for more information.Hard Title in CambodiaHard titles are the most secure proof of property ownership and are considered the best Cambodian land title.Hard titles are certification of ownership provided by the Cambodian Land Management and Planning office. Hard Titles also include detailed information recognised and certified at a national level by the Ministry of Land and the Cadastral Office. It should be noted that a transfer tax applies when hard title transactions occur.A quick summary of what is a Hard Title in Cambodia:The Hard title is the strongest form of property ownership in Cambodia.In the rare occurrence that a disputed land has both a Hard Title and a Soft Title, the owner of the Hard Title will win the dispute.A Hard title is a land ownership certificate provided by the Land Management and Planning office.Hard titles contain detailed information that has been duly recognised and certified at a national level with the Ministry of Land and the concerned cadastral office.A Transfer tax of 4% per cent will be paid based on the total property value upon the facilitation of the Hard Title transfer.The facilitation of a Hard Title transfer usually takes up to 12 weeks.Foreign nationals are constitutionally prohibited from obtaining Hard Titles. By extension, this prohibits foreign nationals from owning land and landed properties in Cambodia.Soft Title in CambodiaA Soft Title is the most commonly issued Cambodian land title. The Soft Title, however, is only recognised at the local government level. Soft titles are provided at the local Sangkat or district office and are not registered at a national level.The Sangkat (commune) or Phum (village) chief will issue a letter of possessory rights, which refers to the right of “possession” of property. A person is in “possession” of the property when she/he physically occupies the property but is not the owner of the land as recognised by the authority.Although not as secure as a Hard title, they are still considered evidence of possession. Historically, many land transactions have occurred as soft titles to avoid transfer taxes and fees. However, most new major developments are being transacted with hard titlesA quick summary of what is a Soft Title in Cambodia:A Soft Title is the most common form of ownership and the most commonly issued Cambodian land title as the transfer taxes and fees are cheaper than a Hard Title.It is estimated that 85% of Cambodian property owners only have Soft Titles to back up their property claims.It is a Cambodian land title that is recognised at the local government level (Sangkats & Khans).Soft Titles are provided by the local Sangkat or District office and are not registered at a national level - but are still considered a valid legal document of ownership. Soft Titles are relatively cheaper and quicker to acquire for Cambodians.Estimated to take anywhere between 10 to 12 working days to process.Foreign nationals are prohibited from owning a Soft Title. By extension, this prohibits foreign nationals from owning land and landed properties in CambodiaCambodian Strata TitlePrivate ownership in co-owned (strata) buildings is a recently introduced form of property title that also allows foreigners to legally own property in Cambodia.Co-owned buildings or Strata-titled buildings are defined as buildings 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).A quick summary of what a Strata Title in Cambodia is:A Strata Title is a special title commonly used for condo unit purchases that is available to both Cambodian nationals and foreign nationals.There are other mechanisms not necessarily involving a Strata Title available for property ownership for Foreign nationals which you can see in our investment guide.Strata Titles can only be granted if the property in question satisfies these criteria: Only applicable to buildings constructed in 2010 and beyond.Foreigners can only own 70% of the total surface area of the building or property.Strata Titles cannot be issued for properties on the ground floor and/or underground.Strata Titles cannot be issued for any property within 30km of the nearest land border.Private Ownership in co-owned buildings (also known as Strata Title) is the most recent form of ownership and allows foreigners to legally own property in Cambodia.Strata Title is a less common Cambodia land title, but the numbers issued are growing fast.Most new condo development projects offer this type of title to accommodate foreign demand to own property in Cambodia.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 unconstitutional.Strata Titles are issued by the Ministry of Land Management, Urban Planning, and Construction. This means Strata Titles are recognized on a national level.A Transfer tax of 4% percent will be paid based on the total property value upon the facilitation of the Strata Title transfer.LMAP Title in CambodiaTo improve land tenure security, a titling system called LMAP (Land Management and Administration Project) has been introduced in Cambodia.Based on official GPS coordinates, land plots are being registered throughout the country. Should an LMAP title exist for your property already, the borders have been agreed upon between neighbouring parties and are less prone to dispute.A quick summary of what is an LMAP Title in Cambodia:The LMAP Title is another property ownership title issued and recognised on a national level by the Ministry of Land Management, Urban Planning and Construction (MLMUPC) - along with the relevant cadastral offices.The main difference between the LMAP Title from a Hard Title is its inclusion of the exact GPS coordinates that determine the boundaries of the property in question.LMAP Titles can only be obtained on land that has been indexed on a cadastral map. So, if a plot of land has not yet been indexed, the LMAP Title cannot be issued for that property.If the MLMUPC is presently undergoing the necessary LMAP titling process in your village or area where you live, this means you only need to follow what your local authority informs you to do once the project is completed. It is their obligation to communicate with you.It is possible to own a Hard Title without an LMAP Title due to the above-mentioned limitation.A Transfer tax of 4% per cent will be paid based on the total property value upon the facilitation of the LMAP Title transfer.Foreign nationals are not permitted to own an LMAP title. By extension, this prohibits foreign nationals from owning land and landed properties in Cambodia.How to Transfer A Property Title in CambodiaWhen you purchase property or land in Cambodia, it is critical to obtain outright ownership in order to feel secure about your new asset. To complete the process for transferring land titles of ownership, there are particular steps that need to be followed, documents that need to be obtained, as well as the necessary consultations with relevant agencies.Step 1: Verify the title certificate with the relevant Land OfficeThe buyer will first need to verify the land title certificate with the Land Office at the Ministry of Land Management, Urban Planning and Construction (MLMUPC), to check for any debts or other claims to the property.This process requires:The buyer must obtain the original title certificate from the seller to verify their genuine ownership.The buyer will then verify the title certificate with the Land Office at the MLMUPC.The Land Office will inform the buyer if there are any liens (debts), mortgages, or other claims registered to that property.Relevant Government Agency: Land Office at MLMUPCEstimated time to completion: This takes approximately 10 days (should occur simultaneously to steps 2 and 3)Step 2: Obtain information on the propertyThe buyer must then obtain information on the property from the relevant Commune Council Official. This involves the buyer contacting the village chief or the Commune Council Official in which the property is located to obtain information about the land/property. In addition to this, an official search of the title should take place at the Khan/District Land Office.Relevant Government Agency: Commune Council (Relevant District/Khan office in your property’s area)Estimated time to completion: This should take approximately 10 days (we advise that this be done in parallel to Steps 1 and 3)Step 3: Obtain the certificate of incorporation and official documents from the sellerIf the landowner is a legal entity, the buyer must obtain;A copy of the ID of the shareholder, or person acting on behalf of the company.A certified/notarised copy of the Certificate of Incorporation of the seller’s company as issued by the Ministry of Commerce.Any other official documents from the seller relating to the company and the transaction.All of these documents are needed to verify the accuracy and identity of the company name appearing on the title certificate. Further documents needed to verify the seller’s authorisation to transfer the property to the buyer are;A special power of attorney.A Resolution signed by the Board of Directors from that company authorising the named individual (seller) to represent the company at the Land Office (MLMUPC).A power of attorney specifically stating that the seller can bring into effect that Resolution to transfer land titles of ownership to the buyer.Relevant Government Agency: Ministry of CommerceEstimated time to completion: This process should take around 10 days (should occur simultaneously with steps 1 and 2)Step 4: Apply for registration at the District Land Office (MLMUPC)When the buyer and seller, whether they are as an individual or a company wish to complete the property transaction, they must go together to the District Land Office at the MLMUPC to arrange, prepare, and sign the relevant documents.The documentation needed for this step is:The Company’s statute.The Company’s Certificate of Incorporation (obtained in Step 3).Both of the Power of Attorney documents (obtained in Step 3).The original Title Certificate held by the seller must be presented to the District Land Office at the time of signing the deed, in order to have the name of the new owner officially inserted on the document.Relevant Government Agency: District Land Office, MLMUPC (District Land Office of the Ministry of Land Management, Urban Planning & Construction)Estimated time to complete the step: This step takes between 20 and 30 days.Step 5: Pay transfer taxA transfer tax of approximately 4 per cent of the total value of the property is paid to the Ministry of Economy and Finance at the General Department of Taxation, in the district that the transferred property resides. A tax receipt is then issued to prove that the property transfer tax has been paid.In Phnom Penh, however, this tax is not assessed based on the true transacted value of the property; but, rather, based on a schedule of the price of property determined by the Phnom Penh Municipality. The assessed valuation by the Phnom Penh Municipality is based upon factors such as; the total number of square meters, the land’s location, use, potential use, and other variables.To put this quite simply the transfer tax is not based on the actual price of the land which is sold, which is usually the case, rather it is based on the assessed value made by the Phnom Penh Municipal office, which may be higher than the tax rates in other provinces.If the land is more than 1200 sqm, the surplus of the land will also be subject to “unused land tax.” For land less than 1200 sqm, the unused land tax is not applicable. The time for the General Department of Taxation to complete the calculation of transfer tax will depend on the location of the land and its size.Relevant Government Agency: General Department of TaxationEstimated time to complete the step: This process should take around 1 dayStep 6: Return to the cadastral office to complete the registration processAfter all relevant taxes are paid, the parties may return to the cadastral office at the District Land Office of the Ministry of Land Management, Urban Planning & Construction (MLMUPC) and sign/thumbprint an MLMUPC form for buying/selling real property, as filled in by MLMUPC official.The signing/thumbprinting must be witnessed by a local authority such as the commune chief, who will also give their thumbprint. These procedures are based on Land Law Articles; 65, 244 and 245. Land Law Article 69 bars the transfer of property unless all necessary taxes are paid. The documentation provided should include payment receipts of the transfer tax (obtained in Step 5).Step 7: Obtain the certificate of title from the Municipal Land OfficeObtain the certificate of title from the Municipal Land Office: The Khan/District land office forwards all the “transfer documents” to the Municipal Land Office where it issues the final Certificate of Title in the new owner’s name. It is now registered.Stay up-to-date on the real estate industry in Cambodia and get real-time updates on real estate news as they happen. Download the Realestate.com.kh App now!Article by: