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Property tax incentive to help curb economic risk

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Property developers have been providing competitive interest rates and options for buyers to boost the industry. Heng Chivoan

Property tax incentive to help curb economic risk

Covid-19 and the partial withdrawal EU’s Everything But Arms (EBA) scheme will hinder the growth projection of Cambodia’s economy this year, the director-general of General Department of Taxation (GDT) Kong Vibol said.

Speaking at a seminar in Siem Reap on Monday, he said to prevent risk to the economy, the government has laid out an incentive policy for the construction and property sector where property below $70,000 will be tax exempted.

In light of this, he called on property developers to consider lowering prices in line with the tax exemption provided by the government, to maintain the growth of the sector and the national economy.

“I call on housing developers to seek any means to lower property prices to maintain the market and to contribute to boosting general economic growth,” he said.

Vibol said in the past, most property developers have been providing competitive interest rates and payment options for buyers to boost the industry.

The government’s latest tax incentive, he said, should provide further help to maintain the growth amidst the challenges from Covid-19 and EBA withdrawal.

Khmer Foundation Appraisals Co Ltd president and CEO Noun Rithy welcomed the GDT initiative to lower property prices, saying it will contribute to industry-wide improvement.

“We appreciate the incentive by the government and the GDT’s call to lower the price of properties. It will be good for the sector as it will test its resilience. The incentive will also be good for the economy as it will draw property buyers,” he said.

Minister of Land Management, Urban Planning and Construction Chea Sophara said last year that the government approved more than $9 billion worth of capital investments in the construction sector – a nearly 80 per cent increase compared to 2018.

This, he said was largely due to the contribution of Chinese investors in Preah Sihanouk province.

There were 1,081 registered companies working on construction projects in Cambodia as of November. Four hundred and eighty-five of these were from China, Korea, Thailand, Singapore, France, the UK and the US among others.

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