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PM: No tax on property worth less than $70K

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Prime Minister Hun Sen on Wednesday announced the suspension of the four per cent stamp duty tax on property worth less than $70,000 between this month and January next year. Heng Chivoan

PM: No tax on property worth less than $70K

Real estate insiders rejoiced as Prime Minister Hun Sen announced the suspension of the four per cent stamp duty tax on property worth less than $70,000 between this month and January next year.

Low to middle-income earners, developers and stakeholders stand to benefit greatly from the move, they said.

Hun Sen was speaking on Wednesday at the inauguration of National Road 58, which connects Banteay Meanchey province’s Poipet town to Oddar Meanchey province’s Samrong town.

The measure will compel affordable housing developers to construct more homes, which lower-income earners can afford, he said.

Phnom Penh residents will be encouraged to seek more affordable condominium units, he said. “When one buys a unit that costs, say, only $50,000 or $60,000, it will not be liable for tax.”

Hun Sen said the government policy comes at a time when Cambodia is suffering from the negative effects of the global economic and financial crises, and as the region reels from the coronavirus outbreak.

Ieng Sotheara, the co-founder of Arakawa Co Ltd, which is currently developing the low-cost condominium project Arakawa Residence in Sen Sok district’s Teuk Thla village, lauded the new policy.

“This will offer more opportunities for low- and middle-income earners to purchase [homes] as they will not have to pay the stamp duty tax, equal to about four per cent of the total property value,” he told The Post on Wednesday.

The measure have three main benefits – helping ease buyers’ tax burden; making developers’ units easier to sell; and boosting business for real estate agents and construction material providers, Sotheara said.

The Arakawa Residence is built on 1.36ha and divided into two phases. Phase I consists of 10 21-storey buildings comprising 1,680 units and is scheduled to be completed by the end of this year.

Phase II consists of six buildings comprising 1,280 units and is scheduled for completion by next year’s end.

The units range in size starting from 23sqm, with prices ranging between $28,500 and $65,000. Currently, Phase I is currently 95 per cent sold, Sotheara said.

Keller Williams Sen Sok regional operation principal Sam Soknoeun said the one-year tax suspension will generate more projects to fulfil the rising demand among Cambodians for housing units priced less than $70,000.

The four per cent stamp duty tax translates to as much as $2,800 in profits for buyers, he said.

“Although the offer is only for one year, there is an opportunity for developers’ swift success on sales because buyers will not have to spend as much as before,” he said.

Cambodian Valuers and Estate Agents Association president Chrek Soknim lauded the move, saying that it will also heighten the number of real estate project registrations.

“It’s good for all stakeholders – buyers, developers and real estate agents will be more active,” he said.

Ministry of Land Management, Urban Planning and Construction spokesman Seng Lot could not be reached for comment on Wednesday.

In 2014, Cambodia adopted a national housing policy to promote greater housing development for its residents.

The government plans to provide an additional 55,000 affordable new homes each year to accommodate the estimated 7.9 million people set to live in the Kingdom’s urban areas by 2030, a forum on national housing heard in June 2017.

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