Immovable property and tax registration procedure in Cambodia

• 25 June 2020
• Local News
• 10804 Views

Immovable property registration is very important in managing, trading, and transferring property. It also confirms the legitimacy of those immovable properties. Immovable property registration is subject to any land and buildings that are taxable. Generally, all property owners with immovable properties worth more than 100,000,000 riel are taxable. (Read more)

According to the Law on Immovable Property Tax 2009, all property taxpayers are obliged to register their immovable properties at any fiscal administration where their properties are located. This registration is to be made by the end of September of each tax year and the property which has already been registered is not re-registered in the following year.

An immovable property registration is done only once but the tax payment on immovable properties throughout Cambodia take place annually with a rate of 0.1%. The tax payment is dependent on the type of property and where it is located.

When the registered property is transferred through acquisition or change of ownership, change in size, distribution or dissolution, the immovable property owner must pay a 4% rate of registration tax.

e.g. Mr. A has 3 hectares of land in Siem Reap city. He has to register his property and pay the tax at 0.1% rate. Later on, he divides the lands into 3 lots for his three children. So, the transfer of ownership of 3 lots must be paid the registration tax at 4% rate. In this case, in the year the lands are distributed to his children he did not pay the annual tax; however, his children have to pay 0.1% tax and 4% tax in the same year.

In principle, immovable property owners must measure and calculate their property taxes on their own.

How to measure immovable property?

The owner of the property must measure the area of ​​land, houses, and other constructions. For land, the owner has to measure it taking the centre of the fence or the boundary as a basis. The houses, buildings, and other constructions are measured from the centre of the wall and the roof for gas stations, restaurants, shops or car washes.

The calculation of immovable property tax

To know how much to pay, firstly the tax basis has to be calculated by multiplying the value of immovable property by 80% and subtracting 100 million riel. Then, multiply the number of tax basis by 0.1% (annual tax rate for immoveable property).

Prakas No. 343 SHV. PRK dated 22 March 2019 on the determination of the registration tax basis for the transfer of ownership or possession of immovable property determines clearly the registration tax basis applicable to the transfer of ownership or possession of immovable property.

Moreover, the owner should remember that the value of an immovable property shall be determined by the Immovable Property Assessment Commission depending on market value​ or depending on the age of the construction and the type of construction (concrete and non-concrete bricks).

What documents are required when registering?

After measuring and calculating, the owner has to register its immovable property tax. When applying, the owner should bring important documents such as:

– Letter of Birth or Identity Card or Passport for foreigner

– Family Book or Residence Book or Residence Certification

– A title of possessory right over immovable property or a certificate of ownership over immovable property issued by the cadastral administration or any documents relating to the occupation of the property as specified by the Commune / Sangkat Authority. In the event of a down payment, the property owner must also bring the buyer and seller documents.

In addition, the property owner must make clear to the fiscal administration about the taxable property in the case of:

• The immovable property is divided to sell, transfer or grant and when the divided property should be registered under new ownership
• Land used for houses, buildings and other constructions
• Houses and buildings and structures have been added or reduced or demolished
• A change in owner, occupant or final beneficiary

The taxpayer cannot falsify immovable property tax registration documents. If the tax official discovers that a taxpayer is falsifying the documents, the person is liable under the law on taxation to have an additional tax penalty imposed on the tax of immovable property tax.

For ease of time and expense, taxpayers can download this application form free of charge on the Department of Taxation’s website (www.tax.gov.kh).