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

  • Angkor Wat named as the top landmark for the second year

    Travel website TripAdvisor has named Cambodia’s ancient wonder Angkor Wat as the top landmark in the world for the second year running in their Travelers’ Choice Award 2018, an achievement Cambodian tourism operators expect will attract more tourists to the Kingdom. The website uses traveller

  • Hun Sen detractors ‘will die’

    Prime Minister Hun Sen on Wednesday said those who curse or insult him would eventually die without a plot of land to bury their bodies after being killed by lightning, suffering the same fate as those who recently died in Thmar Baing district in Koh

  • Monks given ‘Samdech’ title for contributions

    Three senior monks on Thursday were given the highest-ranking title “samdech”, with Prime Minister Hun Sen saying that the promotions were due to their contributions to Buddhism. The three distinguished monks were promoted on Thursday morning at Botum Vatey pagoda in Phnom Penh, at a

  • Facing possible sanctions, PM criticises Washington’s rights record

    While United States congressmen are discussing the Cambodia Democracy Act and an amendment that could impose more sanctions against Cambodia’s government, Prime Minister Hun Sen on Tuesday counterattacked by questioning the respect of human rights and democracy under the US-backed Lon Nol regime, and