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Cambodia: Stamp duty tax exemption extended for another year
The government has decided to extend the stamp duty tax exemption deadline for property worth less than $70,000 from January to December 2021.
The official announcement, released this week, is intended to boost the economy by encouraging more property transactions. In its announcement, the government also urged developers to provide more discounts to buyers.
This is an extension of the stamp duty tax exemption first anounced by Prime Minister Hun Sen on Feb 24. That exemption was due to expire at the end of this year.
The exemption applies to property developers registered at the Ministry of Economy and Finance. Its purpose is to reduce housing prices as low as possible for low- to middle-income citizens. The exemption also includes condominiums.
At present, the stamp duty tax on real estate including houses, buildings and other types of property is set at 4 percent.
Group Chief Executive Officer of Cambodian Investment Management Anthony Galliano said the extension of the elimination of the tax for transactions under $70,000 would benefit the affordable housing sector and the lower- to middle-class most.
He also noted the elimination would likely have only a marginal effect, adding there had already been signs that property speculation had declined and prices had moved downwards. Galliano added thatgovernments have limited tools to invigorate a property market in the absence of intervening on interest rates, but tax stimulus is a potent measure.
“The extension will be welcomed by the real estate industry, given the fragility of the market, and should encourage home-ownership in affordable housing, one of the fastest-growing economic spaces. With expectations for the economy to recover in mid-2021, there is light at the end of the tunnel and tax revenues can suffer short-term to ensure economic stability in the long term,” he added.
Cambodia’s mortgage applications were up by 50 percent in the third quarter of 2020, according to a report by the Cambodia Credit Bureau. The outbreak of COVID-19 significantly slowed the surge of Cambodia’s property market. However, as the year draws to a close, the sector is starting to see signs of recovery mainly fuelled by local demand.
As the threat of COVID-19 persists, property developers have shifted to meeting the preferences of the local market. Affordable and mid-tier properties, which are popular among many local buyers, have seen sale prices largely remain stable throughout 2020, according to Market Trends by Realestate.com.kh.
Source: https://www.khmertimeskh.com/50797156/stamp-duty-tax-exemption-extended-for-another-year/