(Borey or commonly known as a gated community, a popular type of property among Cambodians / Realestate.com.kh)
What is landed property?
The simplest answer is, Landed Property is a property that is either land or a dwelling on the land.
Under Article 44 of the Constitution, foreigners cannot own land in Cambodia. Along with long-stay/retirement visas and work permits, this is probably the most talked about subject in the country.
So, is there any way a foreigner can own a piece of the Kingdom?
Indeed, there are a number of options available to you.
Option 1: Forming a company with a Cambodian citizen
The safest method by which foreign nationals can purchase real property within Cambodia is to form a limited company in partnership with a Cambodian citizen.
Option 2: Purchase plus long-term rental
This method allows foreign nationals to purchase real property and register the Title Deed in the name of a Cambodian citizen. This method may not give you either the peace of mind or take the opportunity to “flip” the property feasible.
Option 3: Registering real property with a Cambodian citizen
This method is very similar to Option 1 but requires 100% trust in the Cambodian citizen.
Option 4: Marriage to a Cambodian national
Foreign buyers who are married to a Cambodian national can register their property using the name of their spouse on the Title Deed.
Option 5: Acquisition of honorary Cambodian citizenship
A foreigner may be granted honorary Cambodian citizenship if he or she donates a significant sum of money to the Royal Government of Cambodia for the purposes of benefiting the people of Cambodia.
What does ‘off the plan” buying mean?
Off-plan purchasing is literally what it sounds like. In this case, you are purchasing your landed property (house) off the plan. In most cases, the house may be in a mixed-use estate or gated community. Like a condominium, a gated community or mixed-use estate may be strata titled. It is essential any potential investor establish the tenure of the property they are purchasing
The different land titles in Cambodia are Soft Titles, Hard titles, ‘Strata Tittle’, and LMAP
Although we are discussing Landed Property, for ease of understanding we will use a Condominium as an example.
A condominium development can be Strata Titled, each individual apartment has a title, however, the building and grounds sits on an overarching title, with each apartment forming part of the “strata”. In some cases, this titling can be applied to Landed Property as well. You have title to your house, however, the infrastructure and land not included in your property may form part of the strata title for the entire development.
It is essential to ensure when you’ve found your dream property; you complete a title search. This confirms that there is a suitable title to the property and the person selling the property is actually the owner or owners’ representative of the property (in case you are purchasing from a company and not an individual owner). In the case of a representative, the person should be certified to represent the selling company at the Land office. Request documents that prove this.
The Ministry of Commerce will have issued a certificate previously, be sure to receive a bona fide copy of that certificate. A title search will also identify any encumbrances attached to the property.
Check with the local Commune council
Where applicable, in addition to checking the title, you or your agent must contact the local commune council and request more information about the property.
A commune council is responsible for overseeing the impacts of development on the area, infrastructure requirements, health services etc, amongst other council applicable matters.
Pay the deposit
When you have found a property that suits your needs, you’ll need to pay a deposit that is equivalent to an agreed percentage of the property value.
Visit the cadastral office
At this stage, you and the seller, or their representative, need to visit the Cadastral Office and organise the documentation needed to progress the sale.
Prior to your name being placed on the title, the seller must present the original title document, known as the Deed.
The Cadastral Office will prepare the necessary documents and ready them for submission. This process could take a number of weeks or months.
Time for the tax office
You’ve received the documents from the Cadastral Office, now it’s time to visit the General Department of Taxation to arrange the payment of the Transfer Tax. Be sure to bring the receipt and any required documentation from the Cadastral Office.
After processing, the final documents will be sent to the Municipal Land Office, which will in turn issue a certificate of title in your name. As with many things in Cambodia, you may need to wait a while before you will receive the final documents. It should be noted there are other taxes that may be applicable to your property, now and in the future apart from the transfer tax such as, VAT (if applicable), Property tax, Rental Income tax and Capital Gains tax.
You can see by this general outline of the process; it would be wise to engage a suitably experienced and qualified agent to act on your behalf. Failure to complete the smallest detail correctly can lead to delays and may affect the sale.
As we have outlined in previous articles, there are many advantages to buying property Off the Plan. Although specific to condominiums, the advantages are very similar for Landed Property.
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