The Ministry of Economy and Finance announced measures to support the Construction and Real Estate of borey amidst global economic uncertainties.
According to the announcement, despite Cambodia's social and economic recovery gradually taking shape in the form of a new normal, global financial and economic uncertainties remain high and continue to pose concerns for the country's economic growth. These uncertainties include slower-than-expected global economic recovery, escalating tensions in Russia and Ukraine, prolonged tightening of monetary policies in developing countries, ongoing disruptions in global supply chains, and intensifying global financial stress.
In this regard, to maintain stability in the construction and real estate industry, which is considered a priority sector for supporting overall economic growth and ensuring sustainable employment for workers, as well as enhancing the affordability of housing for low to middle-income populations, the Cambodian Government has decided to introduce a series of additional measures:
- Developers of borey development projects currently operating and holding a real estate business license from the regulatory authority for real estate and mortgage loan business will continue to be exempted from phased taxation until the end of 2024. For developers who do not yet have a real estate business license, it is mandatory to register their projects with the regulatory authority for real estate and mortgage loan business and obtain the license, in accordance with the valid procedures, by the end of 2023 at the latest, in order to have the tax exemption extension until the end of 2024.
- The tax payment deadline for developers of borey housing projects with a value of less than $1 million will be extended from 12 months to 18 months, while for those with a value of $1 million or more, it will be extended from 24 months to 36 months.
- New developers or developers planning projects must pay taxes in accordance with the existing procedures and must keep proper accounting records.
- The implementation of capital gains tax will continue to be deferred only for the real estate until the end of 2024.
- The stamp duty for ownership or transfer of all types of housing within borey with a value lower than or equal to $70,000 will be exempted and extended until the end of 2024.
- Banks and financial institutions are encouraged and required, based on voluntary agreements and principles of the institution with borey developers, to restructure loans based on their actual capacities, in accordance with the regulations on "credit risk rating and provisioning for real estate" issued on December 1, 2018.
- Other penalties for borey developers will be waived, but developers are still required to fulfil their obligations in accordance with the regulations on the Prakas No. 089 MEF.PrK "Management of Real Estate Development Business".
- The implementation of the obligation for an independent audit of financial statements, as issued by the Ministry of Economy and Finance on July 10, 2020, will be deferred until the end of 2023.
The Economic and Monetary Policy Committee (NRPC) will establish a working mechanism to regularly monitor and evaluate the situation in the construction and real estate industry and will propose more specific policy measures in addition to the measures already taken by the Cambodian Government.
With these measures, the Cambodian Government aims to provide support to the real estate sector, promote economic growth, and ensure sustainable employment for workers while enhancing the affordability of housing for low-middle-income populations in Cambodia.
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