Residential building construction in Phnom Penh. Post Staff
Cambodian real estate experts have praised the government's decision to extend tax incentives for real estate transactions and related services, viewing it as a crucial step to sustain and promote growth in a sector that has struggled since early 2020 due to the Covid-19 pandemic.
On October 9, the Ministry of Economy and Finance announced the continuation and extension of these tax breaks.
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The notice follows the government’s decision, approved by Prime Minister Hun Manet, detailed in the special statement on the "Achievements of the First Year of the Seventh Legislature of the National Assembly" on August 22. It outlines a reduction in tax burdens for housing developers and property owners.
According to the ministry, some taxes will be exempted, including stamp duty on property ownership transfers (except for residential property under $70,000) and capital gains, property and unused land tax. The periods will vary, with some exemptions lasting until the end of 2024 and others until the end of 2025.
Sorn Seap, president of the Cambodian Valuers and Estate Agents Association, told The Post on October 10 that this reflects the government's continued support for the private sector, especially real estate, which has been impacted by the global crisis in recent years.
"The continued tax exemption will ease the burden on developers, property owners and buyers. This will also promote a more robust property market, leading to more competitive prices,” he noted.
Despite these positive developments, Seap highlighted that the market still faces significant challenges and will likely only revive once sectors like tourism, agriculture and exports recover. When those sectors flourish, he believes the real estate market will follow suit.
Po Eavkong, CEO of Advance Real Estate, noted that the new government measures will support and encourage the market to resume activity. He added that as real estate recovers, other industries will benefit as well, stressing that extending tax incentives is vital for the sector’s recovery.
“These tax exemptions are part of a broader strategy to accelerate the recovery of Cambodia's construction and real estate industries,” he said.
Economist Ky Sereyvath from the Royal Academy of Cambodia explained that the government’s decision demonstrates its efforts to boost real estate transactions, which are crucial to the economy.
He acknowledged that while tax exemptions could lead to a loss in government revenue, it is a necessary measure at this time.
“This tax exemption won’t impact government revenue significantly because there are few property transactions now. Whether taxes are in place or not, there would be little income,” he said.
Given the global economic challenges caused by Covid-19 and ongoing conflicts, the government has introduced various measures to support the private sector, particularly sectors heavily impacted, such as tourism, services, real estate and construction.
