NO BUSINESS SALES HERE PLEASE, WE HAVE A SECTION FOR THAT IN THE CLASSIFIEDS.
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Introduction of stamp duty for soft title properties
It seems like the directive of H.E. Kong Vibol, Director General of GDT, presented in Cambodia’s first Tax Forum in September is swiftly moving into action, with officers checking rental contracts of commercial locations for VAT and now what appears to be the introduction of a soft titled property transaction tax. We will unofficially call this a “stamp duty” tax for now.
soft-titleAt the start of the week, Sreyleak EnChan, Yong Yap’s star consultant, was processing a new sale transfer at the sangkat office (local authority) when surprisingly, a new procedure was in place to transfer, with the need for the Ministry of Land Management, Urban Planning and Construction (MLMUPC) and the General Department of Tax (GDT) to be involved.
Yong Yap Properties have met and discussed with the five main sangkats of khan Daun Penh in which they specialize in, along with verifying as much as possible with the khan and other related sources, the procedure now appears to be the following:
Register to transfer property at your local sangkat office as per usual
The local MLMUPC office will be informed and an appointment arranged to inspect and measure the property
A stamp duty tax invoice will be issued for the vendor
Once the sangkat has confirmed payment from GDT, the title process can continue as per normal to the khan.
Ministry of land management urban planning and contructionThe additional costs appear to be $50 for MLMUPC to measure and issue invoice. Stamp duty tax appears to be $6-8/m2 for the internal size of the property. For the standard one bedroom flat, you would be expected to pay an additional $400-$700. Transfer time is now expected to take 4 – 6 weeks, previously 3 – 10 days.
This has come as no surprise as there has been rumors of imposing stamp duty tax on soft title properties since the start of the year. The surprise (or lack of in Cambodia) is that in typical Cambodian style, this law was enforced overnight without information passed onto the public or even the local authorities handling the situation, causing much frustration in the industry.
Looking forward, if all our findings are correct, we hope this will bring more transparency and confidence in the security of soft titled properties to the market. ACLEDA is the first major bank to provide loans for soft titled properties, with this additional tax registration, it should lead the way for other major banks to follow suit.
Yong Yap Properties
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Yes.Bitte_Kein_Lexus wrote:This doesn't seem like a yearly tax, but only when property is sold, correct?
Yes I think so. IF this information is correct, a 50 sqm apartment will have an extra $300-500 on the sale, which is not a big deal. However, anything that brings in more bureaucracy, involving more officials, is going to be more complicated.Bitte_Kein_Lexus wrote:This doesn't seem like a yearly tax, but only when property is sold, correct?
Big question, if they are estimating 4-6 weeks for the transfer now, how long will it really take ? Do you have to pay extra to speed things up ?... a new procedure was [is now] in place to transfer, with the need for the Ministry of Land Management, Urban Planning and Construction (MLMUPC) and the General Department of Tax (GDT) to be involved.
We will see. If anyone is in the process of buying with a soft title right now, any information would be useful.Transfer time is now expected to take 4 – 6 weeks, previously 3 – 10 days.
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