Real estate taxes in Cambodia come in various forms, but today Cam Realty highlights five essential property tax types to give readers a helpful basic understanding. These include the annual property tax, property transfer stamp duty tax, tax on property rental income, unused land tax, and capital gains tax on real estate.

First, the annual property tax is paid every year at a rate of 0.1%. It applies to properties with an assessed value exceeding 100 million Riel, which is roughly $25,000 USD. The base value used to calculate this tax is determined by the tax administration, not the actual market transaction price. The tax formula takes 80% of the assessed property value, subtracts 100 million Riel, and multiplies the remaining amount by 0.1%. For example, for a townhouse valued by the authority at 200 million Riel or around $50,000 USD, the formula is ($50,000 x 80% – $25,000) x 0.1% = $15. This means for a townhouse assessed at $50,000 USD, the annual tax due is $15 USD.

Second, property transfer stamp duty tax is payable when ownership is bought, sold, or transferred from one owner to another at a rate of 4% of the property value. However, this tax is exempted for property transfers among direct relatives, such as from parents to children or grandparents to grandchildren, as well as under specific conditions set by the government.

Third, tax on property rental income is calculated at a rate of 10%. The party responsible for paying this tax is the property owner or the landlord who leases out the property. For instance, if a property owner leases a commercial townhouse to a business owner for $1,000 USD per month, the owner must pay 10% in rental tax, which amounts to $100 USD per month.

Fourth, unused land tax applies to land located in cities or designated urban zones, targeting land that is left idle and unused. The tax aims to encourage landowners to utilize their land to its full potential and prevent land holding for speculation. The tax rate is 2%. However, not all vacant land is taxed, as land smaller than the legally set minimum size threshold, agricultural land, land under official audit or government review, state land, and land inside Special Economic Zones are exempt.

Fifth, capital gains tax on real estate applies only to property transactions that generate a profit. The government does not levy this tax on property sales that result in a loss. The tax rate is 20% of the net profit. The total base cost of the property includes the original purchase price, maintenance costs, repair expenses, and other valid expenditures made on the property prior to resale, provided the owner presents clear supporting documentation. For example, if a landowner buys a parcel for $100,000 USD, sells it for $120,000 USD, and has $10,000 USD in documented expenses, the profit calculation is Sale Price – (Purchase Price + Documented Expenses), or $120,000 – ($100,000 + $10,000) = $10,000 USD profit. Therefore, the tax payable is $10,000 x 20% = $2,000 USD.