- Stamp duty tax on immovable property has generated $900M over the past 20 years
- Real estate and construction sectors represent 30 percent of FDIs
- Property transfer tax takes up about 80% of other taxes and services recorded by the Ministry of Land, Urban Planning, and Construction
For the past two decades, stamp duty tax on immovable property brought in about $900M, indicating the outstanding contribution of real estate and construction sectors to economic growth.
According to the Ministry of Land Management, Urban Planning and Construction, from 1999 to 2022, Cambodia earned over $900M from stamp duty tax on immovable property. And the increase of stamp duty tax on immovable property indicates the property sector plays a significant role in driving economic growth. As reported by the World Bank, Construction and Real estate sectors shared approximately 30 percent of foreign direct investment from 2014 to July 2020.
Tax revenues from property transfer tax is amongst the other taxes collected by the Ministry of Land, Urban Planning and Construction, including cadastral service tax, electronic-based cadastral information service, permit for construction fee, as well as factory location rental. These taxes generated about $1B, while the stamp tax on the transferrable property takes up about 80 percent of the overall revenue collection.
Transfer taxation, often known as registration tax or stamp duty, is a 4% tax levied when ownership of immovable property is transferred. The buyer is responsible for paying the 4% stamp duty, but in practice, the seller is most often the one who pays.
The government has exempted stamp duty tax imposed on property valued under $70k to make affordable housing options available to middle-income earners. The exemption has been effective since 2020. However, if there is no modification or update from the GDT, the scheme will be resumed from January 2023.
Written by: Kem Sreyneth