Step-by-Step Guide to Buying Real Estate in Cambodia for Citizens and Foreigners

Buying real estate in Cambodia involves a series of steps that vary slightly depending on whether you are a Cambodian citizen or a foreigner. Here is a comprehensive guide to help you navigate the process:

Step-by-Step Guide to Buying Real Estate in Cambodia

1. Understand the Legal Framework

For Cambodians: Citizens have the right to own land and property outright.
For Foreigners: Foreigners can own properties but are restricted from owning land. They can own condominiums or apartments as long as the building has a strata title and foreign ownership does not exceed 70% of the building.

2. Research and Budgeting

Market Research: Understand the real estate market, including prices, locations, and types of properties available.
Budgeting: Determine your budget, considering additional costs like taxes, legal fees, and maintenance.

3. Engage a Real Estate Agent

Choosing an Agent: Select a reputable real estate agent with a solid track record. They can provide valuable insights and help navigate the local market.
Agent’s Role: The agent helps identify suitable properties, arranges viewings, and negotiates prices.

4. Property Selection

View Properties: Visit multiple properties to assess their condition, location, and value.
Due Diligence: Conduct thorough due diligence, checking property titles, zoning laws, and any potential legal issues.

5. Legal and Financial Preparations

Hire a Lawyer: Engage a local lawyer specializing in real estate to handle legal documentation and ensure compliance with Cambodian law.
Secure Financing: If necessary, arrange financing through a local bank or international lender.

6. Make an Offer

Negotiation: Negotiate the price with the seller through your agent.
Letter of Intent (LOI): Submit a LOI outlining the proposed purchase price, payment terms, and any conditions.

7. Sign a Sales and Purchase Agreement (SPA)

Drafting the SPA: Your lawyer will draft the SPA, which includes all terms and conditions of the sale.
Deposit Payment: Pay a deposit (typically 10%) upon signing the SPA.

8. Due Diligence Period

Title Search: Conduct a thorough title search to ensure the property is free of encumbrances and that the seller has the legal right to sell.
Property Inspection: Perform a detailed inspection of the property to identify any issues.

9. Transfer of Ownership

Final Payment: Pay the remaining balance of the purchase price.
Transfer Documents: The lawyer will prepare and process the necessary documents for the transfer of ownership at the Land Office.

10. Registration

Land Office: Submit all required documents to the Land Office for registration. This includes the SPA, title deed, and identification documents.
Registration Fee: Pay the registration fee, typically around 4% of the property value.

11. Taxation and Fees

Transfer Tax: Pay the transfer tax, usually 4% of the property’s assessed value.
Legal Fees: Settle any outstanding legal fees with your lawyer.
Other Fees: Cover any additional fees such as notary fees or agent commissions.

12. Completion

Title Deed: Once the transfer is complete, you will receive the title deed in your name (or lease agreement if you’re a foreigner).
Possession: Take possession of the property.

Additional Tips

Foreign Ownership: Consider purchasing through a Cambodian company or entering into a long-term lease agreement if you need to own land.
Strata Titles: For condominiums, ensure the building has a strata title and foreign ownership compliance.
Local Culture: Familiarize yourself with local customs and etiquette in real estate transactions.
Language Barrier: If you do not speak Khmer, ensure your agent and lawyer are proficient in your language to avoid misunderstandings.

Key Documents Needed

Identification: Passport or Cambodian ID.
Proof of Funds: Bank statements or financing agreements.
SPA: Sales and Purchase Agreement.
Title Deed: Proof of property ownership from the seller.
Company Documents: If purchasing through a company, all relevant incorporation documents.

By following these steps and working with experienced professionals, you can navigate the Cambodian real estate market and successfully purchase property in the country.