A recently completed borey development in Phnom Penh. Supplied
Several real estate experts have shared their opinion that a 2025 exemption on property transfer taxes – for first-time home buyers and those transferring ownership rights for the first time – will help to drive increased activity, particularly in the residential sector.
The real estate and construction market in Cambodia recorded notable growth from the late 1990s to 2008, before it was temporarily affected by the global financial crisis. After global economic conditions improved, the sector began to see strong growth from early 2010, but this was disrupted by the Covid-19 pandemic. The effects of the pandemic, which began in 2020, are continuing to be felt in the market.
On December 31, 2024, the Ministry of Economy and Finance issued a notification regarding the exemptions.
The notice explained that the exemptions, which will be effective from January 1, 2025, to December 31, 2025, aim to encourage increased purchases from development companies, including residential complexes or condominiums, and further support the real estate sector.
Sam Soknoeun, president of the Global Real Estate Association and chairman of the SAM SN Group, told The Post on January 2 that the exemptions will definitely help boost the activity of residential property transactions.
He noted that the policy is also part of the government’s effort to ensure individuals or families can own their own homes. In 2023 and 2024, residential property transactions were sluggish due to an oversupply, but demand for land purchases and construction projects, especially in special economic zones or industrial zones, has started to rise again.
He believed that the government is putting a strong emphasis on reviving the real estate sector and exploring various means to boost its potential, but warned that it may take some time for demand to meet previous highs.
“Although the government is making considerable efforts to find ways to ease the tax burden, the sector has not yet recovered rapidly, because there has been an oversupply in the past. Therefore, it will still take another 4-5 years for remaining unsold properties such as homes or condominiums on the market to be sold, after which demand will rise again,” he suggested.
Sorn Seap, president of the Cambodian Valuers and Estate Agents Association (CVEA), also believed that the tax exemption measures will help to stimulate the residential property market. He added that as property transactions increase, it will also improve property values.
He claimed that when the real estate market functions well, it positively impacts the economy, increasing construction activities, creating jobs and generating demand for related industries such as cement, steel and domestic businesses.
Seap added that aside from the above points, transparency and proper procedures for property transfers would help promote transparency in the real estate sector, which is crucial for long-term sustainability. Currently, there are some buyers who have not yet completed the legal transfer of property ownership, and if companies or sellers go bankrupt, it could cause numerous issues in the transfer process.
“The implementation of tax exemptions will play a catalytic role in the growth of Cambodia’s real estate market, contributing to overall national economic growth, making it more stable and prosperous,” he said.
The finance ministry announcement explained the details of the exemptions.
First, when people purchase their first property – or transfer title for the first time – they will receive a tax exemption for properties valued up to $210,000. Properties over this amount will be granted tax relief based on a deduction of $210,000 from the taxable value. This exemption applies to only one property per individual, with subsequent properties remaining eligible for a deduction of $70,000.
Properties should be purchased from registered development companies listed with the ministry and other relevant institutions.
All property developers must comply with buyer-seller agreements which are based on fair market prices and purchase agreements must be submitted to the relevant tax administration for review before the transfer of ownership.
The statement also emphasised that properties purchased from developers lacking the necessary licenses or facing financial issues may also be eligible for the tax exemptions, as part of the ministry’s intervention measures.
