Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt should not restrict foreign land ownership



Govt should not restrict foreign land ownership

Govt should not restrict foreign land ownership

Dear Editor,

Prime Minister Hun Sen said the draft legislation allowing foreigners to own apartments will - once completed - give momentum to other sectors of the economy ("PM pushes for property law to boost foreign investment", June 22, 2009).

Yes, of course it will. Many countries in this world allow foreigners to buy properties, include landed properties in their countries. Cambodia's existing laws prohibit foreigners from owning property, which supporters say will prevent speculation and price volatility.

Under existing laws, the property market in Cambodia has been filled with speculators for the last two years prior to the world financial crisis!
There are many other ways to curb excessive speculative activities. Capital gains tax on property is one of the most effective ways. If people buy and sell off property within a short period of time, there must be a reason for it. In most cases, there is a good profit to be made. The government can tax on the price differential. The tax rate could depend on the number of years that the owner possessed the property. The tax rate would be higher for properties held for a shorter period of time.

The government can also impose a property transaction tax to discourage property transaction activities when the market heats up.

Property is an asset that foreigners cannot bring away with them. There is no reason for the government to put restrictions on foreigners, especially those with investments that plan to stay here for the long term to buy property in the country. There are investors who have been here for more than 10 years. They would like to have a house of their own which they can modify after their own taste. They do not want to shift their home every 3 or 5 years because landlords want to take back their properties.

It should be noted that many countries offer permanent resident status to foreigners to encourage them to buy properties. Under the Second Home Scheme, the Malaysian government offers foreigners who buy properties the permanent resident status. This will not only attract capital into the property market, but the brains and long-term investments.

Do remember that the government has to spend huge amounts of money to attract tourists to stay just four to five days. But if you attract a foreigner to set up a second home, they could stay substantial portions of each year!

Of course, to protect the interest of the local people the government can impose certain restrictions on the purchase of property by foreigners. For example, they could restrict foreigners from buying property that costs less than, say, US$50,000. However, the government should not prohibit foreigners from buying landed properties. Those who plan to stay here long-term and are financially capable of doing so would like to own a landed property for a more comfortable stay.

Xijing
Phnom Penh

Send letters to: [email protected] or P.O. Box 146, Phnom Penh, Cambodia. The Post reserves the right to edit letters to a shorter length.

MOST VIEWED

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Phnom Penh curfew starts today

    A two-week curfew from 8pm to 5am starts today in Phnom Penh, a day after a sub-decree detailing administrative measures to contain Covid-19 was issued by Prime Minister Hun Sen. “Travelling in Phnom Penh is temporally banned between 8pm and 5am,” said Phnom Penh governor

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting