Private ownership of land only became possible back in 1992 when the Cambodian Government passed the land law. During this time, the local Sangkat issued ‘soft titles’ to residents.
In 2001 the new land law came into effect, further strengthening an individual’s right to property ownership and since then, many changes have been made in order to accommodate a more dynamic market that would benefit the economy and the people.
It may seem like a lot to take in, but talking about the land ownership law in Cambodia doesn’t always have to be a heavy topic. Here, Realestate.com.kh breaks down things you need to know to be able to invest in land.
What Do I Need To Know Before Buying Land In Cambodia?
Since the redistribution of land in 1992, ownership of land can now be held in Cambodia by means of the different titles available. These includes hard titles, soft titles, strata titles, and LMAP titles. These serve as official proof of ownership in the Kingdom. But what’s interesting about Cambodian land titles is that even if some titles are recognized nationally, some titles are also only recognized at the local government level.
So, What Kind of Title Do I Need to Get?
Hard titles are the strongest type of proof of ownership. It’s given by the Land Management and Planning Office. It contains information that’s recognized by the Ministry of Land and the cadastral office at a national scale. A transfer tax of 4% is paid when a property with a hard title is sold.
A strata title is also a form of hard title but is most commonly given on newer developments. Strata title holds that foreigners are not allowed to acquire a grounded unit and that foreign ownership is limited to 70% of units in any co-owned building.
Soft titles are the most common issued titles in Cambodia. It’s registered and only recognized at the local government level and given by the district office.
Land Management and Administration Project Title are considered the safest kind of land title because it uses GPS to allocate land plots. This accurately shows boundaries of a purchased land.
How Do I Know What Type of Title I Have?
Soft titles typically refer to three documents that can show proof of ownership. These are the application for land occupation, a local government acknowledge letter of transfer, or a simple private sale-purchase agreement.
An application for land occupation is the request made by the possessor of land to the local authorities. A letter of transfer that’s acknowledged by local authorities is a document of transfer that the Chief has acknowledged and signed. While the simple private sale-purchase agreement is an agreement made only between the buyer and seller.
Hard titles also refer to three certificate types. These are the Certificate of Land Use and Occupation Rights, Certificate of Immovable Property Possession, and the Certificate of Immovable Property Ownership.
Certificate of Land Use and Occupation Rights are called “chicken feather titles” because it has an image of a feather printed on it. This refers to titles issued to owners before the enactment of the land law.
The Certificate of Immovable Property Possession is given if the land registration was initiated by an owner in an area where the systematic land registration hasn’t been conducted yet by the government. This is known as “sporadic land registration”. This document usually doesn’t have the map of the property included.
The Certificate of Immovable Property Ownership is given after a systematic land registration by the government. Unlike the Certificate of Immovable Property Possession, it has a map showing the land’s location and boundaries.
What if I Want to Get a Hard Title For Security?
In a recent breakfast meeting organized by Sciaroni & Associates, Sereyrath Kiri -- an associate of the firm -- saying that soft titles can be made into hard titles via a sporadic land registration. Kiri also mentioned that the cost to do so depends on the location and size of the property.
How Can Foreigners Own Land in Cambodia?
The Land Law of Cambodia actually states that foreigners are not allowed to own property in the country except through a strata title. But strata titles for residential units are only usually made in co-owned buildings and not land. But foreign-owned land is not uncommon in Cambodia. But like most laws in any other country, there are exceptions that foreigners can utilize such as marrying a Cambodian citizen, becoming a citizen yourself, long-term lease, via a nominee structure, through forming a landholding company or via concession.
How Do Foreigners Legally Protect Their Land Ownership?
Locals may be more secure in just getting a hard title and avoiding scams. Foreigners, on the other hand, will need to deal with a few more security details for them to safeguard their land. But it’s not as complex as people think.
When a property is owned through a Khmer nominee, foreigners should enter a nominee agreement with the Cambodian citizen. The Khmer nominees should also grant foreigners a long-term lease. A mortgage should be made and registered on the title. Foreigners should also hold the original title. To prevent any misunderstandings in the event of an accident or death, the nominee should also prepare a will or supporting documents.
Should ownership fall on a landholding company, it is important to enter into nominee protection documents. The company should be required to grant the foreigner a long-term lease. Similar to the first scenario, a mortgage should be taken and registered on the title and a will or supporting documents should also be prepared.
Like most countries, laws in Cambodia continue to evolve to accommodate the demand of both local and international investors. So, knowing these things and keeping yourself updated may keep you from a whole lot of trouble in the future and even bring you a proper return of investment.