Expatriates are allowed to purchase a property in Cambodia. Here is an overview of related procedures.
Many years ago, the democratic Kampuchea regime and the Red Khmers had abolished the ownership of property and destroyed all of Cambodia's official property records. Thus, all properties became state properties, hence abolishing the concept of private property. In 1989, that is 10 years after the end of the regime, Cambodian authorities have managed to create new real estate regulations so as to recognize private property in the country. In 2001, the Land Law was finally able to clarify many issues, especially regarding the willingness of foreigners to purchase property.
Therefore, you are authorized to buy a property in Cambodia if you intend to settle there permanently. However, there are some requirements to be filled in before proceeding. Make sure to be aware of these.
Types of titles
There are two types of property titles in Cambodia: the flexible title and the permanent title.
Most Cambodian properties are governed by the flexible title whereby the property acquisition is registered at the local council (Sangkat) or at the nearest district office to their location. Documents to be produced are a letter written by the previous owner that has to be stamped by the Sangkat. It can be in the form of a certificate issued by the local council or the district office or a document proving the status of a land or building.
Note that you are required to inquire with the Sangkat, the district office or with neighbors whether the property really belongs to the person who is selling it to you in the case of flexible title properties. It is best to be careful in this regard. Moreover, different taxes and fees apply to the flexible title property.
The permanent title, for its part, is issued by the Cadastre Office and is nationally recognized by the ministry of Lands, by the Sangkat and the district office. Unlike the flexible title, the permanent title is unanswerable.
In any case, flexible titles can be converted into permanent titles.
The stratum concept, which still exists in Cambodia, applies to apartment buildings and can be divided into several properties.
The goodwill is a long-term lease with a validity period ranging between 15 and 50 years which is renewable for an additional period of 50 years.
Free property refers to land ownership without restriction. Foreigners are only allowed to purchase a land through a company which must be owned at 51% by a Cambodian citizen. However, if you make a significant financial contribution to the Cambodian government, with the aim of benefiting the country, you then become a "Honorary Citizen". You will then be eligible to the right of purchasing land in full ownership as an individual.
The concessional lease which has a 99 years duration, is granted by the Cambodian government on private land which remains owned by the state. This land is mainly intended for development and industry. But beware! These lands can be occupied for a long period of time. Hence, you are advised to seek advice and help in this regard.
Foreigners are allowed to purchase one or more properties in Cambodia under some conditions:
In the case of a property which is found in a building, that is a strata which can be divided and sold into individual apartments, the property must be located on the first floor. You are allowed to purchase up to 70% of the proposed areas. Note that most new buildings nowadays are build for this purpose.
In the case of a private property with or without structure, you allowed to buy only up to 49% of the property. Note that this private property must be purchased by a company whose shares are owned at 51% by a Cambodian citizen. Moreover, you can buy any type of property as long as it is connected with the company.
To buy a property in Cambodia, you must have a valid passport and visa. You also have to hire a real estate agent or a lawyer to assist you with related procedures. Make sure to inquire about the property and its owner before proceeding. When the owner produces his identity documents to you, make sure to verify their validity with concerned authorities.
According to the new Civil Code, the long-term lease allows you to occupy a property for a duration between15 and 50 years. Previously, a 99 years lease was applied. In case you have chosen the long-term lease, note that the owner must obtain your authorization before proceeding with the sale of the property. A notice may be filed at the Land Management Office. A clause can also be included in the contract so as to grant you the right to own property with the owner's consent.
The long-term lease has to be registered with the Land Registry and transferred to the property's title. You may request proof of your interests in the property. This document can also be used as evidence when applying for a loan, when assigned, bequeathed or re-listed.
Once you have agreed on the price for the property, you are required to make a 10% deposit to confirm the sale. You might have to open a bank account for this purpose. Meanwhile, you have to verify the property title's validity.
You are not likely to find public notaries in Cambodia for real estate transactions. You are thus advised to hire a lawyer.
You must be physically present during the transfer of title.
You are advised to transfer the amount of the transaction on a separate account from that of your real estate agency, if any.
Do not pay the full amount due to the owner until the title transfer has been completed and you have visited the property again. The transfer may be delayed due to certain formalities.
If you are not civilly married to a Cambodian national, you are required to pay the agreed amount in cash. Bank loans are only reserved for Cambodian owners who have the right to mortgage their property.