New Procedures for Property Tax Collection

• 27 August 2016
• Property Focus
• 2341 Views

Starting from this June, all property ownership transfer or property with ownership rights in Cambodia must follow the new tax collection guidelines which aim to ensure transparency and convenience.

The Prakas issued on 14 June 2016 by the General Department of Taxation of the Ministry of Economy and Finance states that for registered property (with title deed) that has the entirety of its ownership transferred or partly transferred (by splitting up a plot or subdividing it for sale), the receiving owner has the legal duty to pay a 4 percent registration tax fee to the government.

In the event that the property was already registered (with title deed) and has had ownership transferred (by splitting up the plot or sub-dividing it for sale) only at the Commune-Sangkat or City-Srok or District level i.e. the ownership title hasn’t been registered, the receiving owner will also need to pay the 4 percent registration tax fee as stated by the law.

For unregistered property, (without title deed) when the property ownership is transferred either entirely or partly (via splitting up a plot or sub-dividing it for sale), the receiving owner has the duty to pay the 4 percent registration tax fee the same as for registered properties.

According to the Prakas, there are a number of situations where a property ownership transfer or property ownership does not have to pay the registration tax fee:

1. Taking ownership via a concession from the government for the national economy or social affairs from the government’s private properties to grant to poor families who need land for housing, industrial agriculture or family-based cultivation
2. Taking ownership that is registered under any ministry’s properties in Cambodia
3. Taking ownership as a diplomatic mission or foreign consulate or international organisation or any international cooperation agency of another government in Cambodia.
4. Taking ownership via family inheritance among relatives: ownership transfer between biological parents and children, husband and wife, grandparents and grandchildren and grant between biological parents and children, husband and wife and grandparents and grandchildren for only the first ownership transfer.

The registration tax is also exempt for the following situations:

1. Ownership transfer or property ownership via inheritance from a relative between biological siblings, parents and children-in-law permits a deduction of 200, 000,000 Riels from the tax base value for inheritance and 100,000,000 Riels from granting.
2. A repeated ownership transfer or property ownership from the second time up as granting via inheritance from a relative between biological parents and children, husband and wife and grandparents and grandchildren permits a deduction of 1,000,000 Riels from the tax base value.

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