What to Know Before You Buy Property in Cambodia

Buying property in Cambodia, whether a condo or a house, presents exciting opportunities, particularly for foreign investors.¹ However, the process is subject to specific laws and regulations, especially concerning land ownership.² Understanding these key legal differences and the purchase process is essential for a secure investment.³

What to Know Before You Buy Property in Cambodia

The single most important factor is foreign land ownership restriction.

• No Direct Land Ownership for Foreigners:⁴ Under the Cambodian Constitution and Land Law, non-Cambodian citizens are prohibited from directly owning land.⁵ This directly impacts the purchase of a house (which is on land) or ground-floor property.⁶
• Condominium Ownership (Strata Title): This is the most common and secure path for foreigners to own property.⁷ Foreigners can hold a Strata Title (Certificate of Ownership of Private Unit) for condominium units in co-owned buildings, provided:⁸
  • The unit is located on the first floor or higher (not the ground or basement floors).⁹
  • Foreign ownership in the building does not exceed 70% of the total private unit area.¹⁰
  • The building must be registered for co-ownership under the 2010 Foreign Ownership Law.¹¹
• House and Land Alternatives: Since foreigners cannot own land directly, buying a standalone house typically requires alternative legal structures, such as:
  • Long-Term Leasehold: Leasing the land from a Cambodian owner for up to 50 years, often renewable.¹² This grants the right to use and develop the land and own the building on it.
  • Land Holding Company: Establishing a Cambodian company where a Cambodian national holds a majority stake (at least 51%) to legally own the land.¹³ This is complex and requires a high degree of trust.
  • Trust Deed: A legal agreement where a licensed trustee (e.g., a bank) holds the title to the property for the benefit of the foreign buyer (the trustor/beneficiary).¹⁴ This is often viewed as one of the safer alternative structures.

The Property Purchase Process

The buying process for a condo (Strata Title) is generally more straightforward than for a house using a land holding structure.¹⁵

1. Due Diligence (Crucial Step)

Before signing anything, you must conduct thorough due diligence.

• Verify Title: Check the property’s legal title to confirm the seller’s legal right to sell and that there are no encumbrances (mortgages, liens, legal disputes).¹⁶
  • Hard Titles are the most secure, registered at the national Ministry of Land Management.¹⁷
  • Soft Titles are locally recognised but not nationally registered, carrying higher risk.
  • For condos, ensure the building has a fully registered Strata Title.¹⁸
• Legal Counsel: Always engage an independent, reputable real estate lawyer.¹⁹ They will handle the title search, draft/review the contracts, and ensure compliance with Cambodian law.²⁰

2. Reservation and Agreement

• Booking/Deposit: A small booking fee (e.g., $1,000–$5,000) is paid to reserve the unit and take it off the market.²¹
• Sale and Purchase Agreement (SPA): This legally binding contract outlines the final price, payment schedule, completion date, and obligations of both parties.²² It should be drafted and signed in both Khmer and English, with the assistance of your lawyer.

3. Title Transfer and Payment

• Payment Schedule: For new developments, payments often follow construction milestones.²³ For completed properties, a significant portion (50% or more) is typically paid after due diligence but before the title transfer is officially submitted.
• Transfer Tax: The buyer is typically liable for a 4% stamp duty tax on the property value (as assessed by the General Department of Taxation).²⁴
• Official Registration: The official title transfer is registered at the Cadastral Office/Ministry of Land Management.²⁵ For foreigners, this often requires personal physical presence in Cambodia to provide a thumbprint on the official transfer documents.²⁶

✅ Key Considerations for a Secure Investment

In summary, for most foreigners, purchasing a Strata Title condominium above the ground floor is the most direct and secure path to property ownership in Cambodia.²⁷ For a house, you must explore secure land control alternatives like a Long-Term Lease or a Trust Deed.²⁸

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