An artist’s rendition of the Phnom Penh Galaxy Garden in the capital’s Phnom Penh Thmey commune. SUPPLIED
Stamp duty exemption on ownership transfer or purchase of real estate worth $70,000 or less will continue until the end of 2022 to reduce the burden on taxpayers, according to the General Department of Taxation (GDT).
This is the third time since February 2020 where the government has waived stamp duty for properties within this value segment.
The decision to extend the exemption is in line with the restoration of Cambodia’s economic growth as outlined by the 2021-2023 “Living with Covid-19 under the New Normal” scheme.
In the meantime, the Ministry of Economy and Finance has urged housing developers to enter into legitimate sale and purchase agreements that are based on actual market value.
It warned that failure to comply would result in GDT investigating housing developers who allegedly reduced the selling price in order to evade tax.
Amatak Property Service Co Ltd director-general Tang Hour told The Post that the latest extension “does not respond” to the slump in the real estate sector, which is impacted by Covid-19 pandemic.
The world economy is also not improving, adding more stress to the situation as the effects of the pandemic have yet to taper, she said.
On top of that, the Russia-Ukraine conflict has pushed up the price of goods around the world, seriously affecting economies including Cambodia’s, she added.
As such, Hour asked if the government can extend the stamp duty for “another two or three years” to assist those looking to buy a home and to allow the sector to grow further.
“The delay [to pay stamp duty is] good but one year is not enough. If possible, please extend for another two or three years to help make the sector better,” she said.
Cambodian Valuers and Estate Agents Association president Chrek Soknim said the postponement of the payment of the stamp duty was a mechanism employed by the government to provide short-term concessions to home buyers.
In the long term, the government should be financially supportive and make it easier for property owners to transfer ownership quickly. The faster the title is transferred, the more tax revenue the state will receive.
“The stamp duty exemption on properties valued less than $70,000 is low, and it is the government’s mechanism to support middle-income and lower middle-income people,” he told The Post.
While buying houses below $70,000 in Cambodia continues to be a normal activity, it is not for investors as there seems to be a higher consideration over their cash flow when investing in this value segment of the real estate sector, he said.
