FAQ’s: New Foreigner Property Ownership Law Implementation
The recent update on Cambodian Property Law on foreign ownership has caught the attention of both current and new foreigner property owners in the country. In this follow-up blog, IPS Cambodia Country manager Grant Fitzgerald addresses questions posed by clients and provides some insight into what to expect in the near future.
Which properties will this effect?
- Hard title properties are registered on the Ministry of Land Management,Urban Planning and Construction who have always upheld the law so it has never been possible for a foreigner to hold a hard title on their own name.
- Condominiums which are properly registered for co-ownership or strata title fall under the Law on Providing Foreigners with Ownership Rights in Private Units of Co-Owned Buildings, dated 24 May 2010, this allows for foreigners to hold a strata title in their own name.
Will the reinforcement of this law be made retrospective?
Based on what has happened in other Khans previously, there have been no retroactive penalties or nullification of a sale for those properties transferred into a foreigner’s name. Whilst we can’t rule this out happening in the future there is currently no reason to believe that the Ministry or Sangkats will take this type of action.
What will happen in the future?
It’s clear that the days of owning a soft title property in Phnom Penh as a foreigner are over. As it stands, the Notification Letter fails to spell out the legal consequences to the foreign owners of property who hold a soft title in their own name. Detailing potential future changes would be speculation at best, what we do know is that if you are a foreigner holding a soft title property in your own name it’s still possible to transfer the title to a Khmer national without any issues.
What do I recommend?
At this stage there is no need to hit the panic button and rush to transfer a property out of your name. However I believe these ongoing changes are a sign of things to come in the future (along with enforcement of work permits, VAT, etc.), so to mitigate your risk exposure I would definitely recommend considering the use of a nominee sometime in the near future.