Is It Better to Sell Cambodian Real Estate Early? Common Mistakes and Key Points to Watch Out For

2025.12.24

Author: Anna Araki / Anna Advisors Inc.

There are two main ways to generate profit from Cambodian real estate investment: income gain and capital gain.
In particular, capital gains on individual transactions are currently tax-exempt, which is a major advantage—however, changes to the tax system are expected in the future.

In this article, we take a detailed look at the benefits and pitfalls when selling Cambodian real estate, along with key points you should be aware of.
We hope you’ll stay with us to the end.

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The Cambodian Real Estate Market Is Well-Suited for Investment

Cambodia is enjoying strong GDP growth, and its population structure is very young, which supports expectations for long-term economic expansion.

Thanks to this robust economic performance:

Land prices, especially in Phnom Penh, are on the rise.
Housing demand is increasing among both foreign high-net-worth individuals and domestic high-income earners.

Cambodian real estate is also characterized by:

An average yield of 5% or more,
With some properties offering yields close to 10%—a very high level by global standards.

In most of the country, US dollars circulate widely, and real estate transactions can also be conducted in USD.
This allows investors to hold assets in dollars, making it easier to mitigate foreign exchange risk.

Thanks to these high yields and the convenience of USD-based asset management, the Cambodian real estate market is attracting growing attention from overseas property investors.

Two Types of Returns in Cambodian Real Estate Investment

In Cambodian real estate investment, returns generally take the form of either income gain or capital gain.
It’s important to plan your investment with one or both of these in mind.

Let’s look at each in more detail.

Income Gain | Ongoing profit from rental income

Income gain refers to the rental income earned by purchasing a property and leasing it to tenants.
In Cambodian real estate investment, it is common to purchase residential properties such as apartments or condominiums and rent them out.

Note that when non-residents purchase residential properties in Cambodia, conditions apply, such as:

Foreigners’ ownership share must not exceed 70% of the total floor area of the building.

The unit must be located on the second floor or above, and

Capital Gain | Profit generated through property sales

Capital gain is the profit generated by selling a property at a higher price than the purchase price.

In Cambodia, many developments use the pre-build scheme:

Investors pay an initial down payment at the start of construction, then
Pay the remaining balance in stages as construction progresses.

By taking advantage of this structure, investors can:

Purchase a property with a relatively small initial outlay, and
Sell once the price has increased in line with construction progress.

This makes targeting capital gains through pre-built properties a powerful strategy.

Furthermore, in Cambodia, non-residents can purchase not only residential properties but also commercial properties, such as hotels and offices.

Pros and Cons of Income Gain

We’ve outlined the two main patterns of returns above; now let’s look specifically at the advantages and disadvantages of income gain.

Advantages of Income Gain

With income gain, you receive monthly rental income from tenants.

As long as there are tenants in your investment property, rental income is generated automatically.
This makes it relatively easy to secure stable ongoing returns.

If you purchase a popular property in a desirable location, you are likely to:

Attract tenants more easily, and
Enjoy consistent, steady income over time.

In many cases, income-gain-oriented investment is managed with the expectation that the initial investment will be recovered over a medium to long term.

Disadvantages of Income Gain

While income gain tends to produce stable ongoing returns, it also comes with significant operating costs.

In Cambodian real estate investment, the following fees and taxes are commonly associated with income gain:

Item (Description)	Amount / Rate (Example)
Registration Tax (tax incurred when registration is completed)	4% of purchase price or official valuation
Brokerage Fee (paid to the intermediary at contract signing)	About one month’s rent, etc.
Rental Management Fee (paid to the local management company)	Around 7% of rent or USD 100/month, etc.
Property Tax (annual tax on property ownership)	0.1% of the assessed property value
Withholding Tax (varies by residency)	14% of annual income for non-residents

These operating costs are incurred regardless of whether the property is occupied.

If you are unable to secure tenants:

No rental income is generated, but
Management fees and taxes still accrue.

As a result, prolonged vacancies can lead to reduced profitability or, in some cases, net losses.

Pros and Cons of Capital Gain

Just like income gain, capital gain has both advantages and disadvantages.

Advantages of Capital Gain

Capital gain is determined by the difference between the purchase price and the selling price.
The resale price is strongly influenced by:

The property’s location,
The condition of the building, and
The assessed property value.

When the assessed value of a property you own rises, you can set a higher selling price, increasing the potential profit from a single sale.

As of 2024, capital gains on individual Cambodian real estate transactions are not subject to tax.
(Corporate gains, however, are taxed at 20%.)

Given the relatively large scale of real estate transactions, the fact that individual capital gains are currently tax-exempt is a very significant benefit.

However, as we discuss later, from 2025 onward there is a high likelihood that individual capital gains will also become taxable, so investors should be prepared.

Disadvantages of Capital Gain

Capital gain arises from the difference between purchase and sale prices, but if:

You cannot sell at a sufficiently high price, or
You cannot find a buyer in the first place,

you may end up incurring a loss.

As we will see in more detail shortly, selling a property also entails its own risks.

In addition, even if you are unable to sell, the following taxes and costs will continue to apply, increasing the potential loss if a sale cannot be completed.

Below is a reference example (not all items apply to all investors):

Item (Description)	Amount / Rate (Example)
Property Transfer Tax (tax due on registration at time of purchase)	4% of purchase price or official valuation
Brokerage Fee (paid to the intermediary at contract signing)	About one month’s rent, etc.
Property Tax (annual tax on property ownership)	0.1% of the assessed property value

When aiming for capital gains, exit strategy–oriented property selection is particularly important.

Five Common Mistakes When Selling Cambodian Real Estate

There are several common mistakes that tend to occur when selling Cambodian real estate.

Below, we introduce five typical failure patterns that often arise when aiming for capital gains.
Understanding these examples will help you avoid falling into the same traps.

1. Buying at Above-Market Prices Due to Lack of Information

Compared with domestic real estate, Cambodian real estate offers fewer accessible information sources, which can lead to situations where properties are bought at prices above market value.

Some local intermediaries may even quote so-called “Japanese prices”—prices that are higher than the local market rate specifically because the buyer is Japanese.

If you purchase a property:

At a price significantly above market level,
It becomes more difficult to secure a sufficient spread on resale,
Making it harder to realize capital gains.

Unfortunately, such cases are not rare, so investors must be very cautious.

When purchasing a property, it is important to:

Develop an accurate sense of the prevailing market price.

Compare it against similar properties in terms of area, age, and specifications, and

2. Abandoned Construction of Pre-Built Properties

With pre-built properties, one effective strategy is to:

Invest a relatively small amount at the early stage,
Wait for the property value to rise as construction progresses, then
Sell at a higher price to realize capital gains.

However, especially in the case of projects by small and medium-sized developers, there is a risk that:

The developer’s cash flow deteriorates, and
Construction is suspended or abandoned.

If construction is abandoned, the funds you have already invested are typically not refunded.

Cambodia’s real estate industry as a whole is still developing, and the withdrawal of smaller developers is not uncommon.

At our firm, we address this risk by only brokering projects developed by large, financially stable, or foreign-affiliated developers.

3. Encountering Fraudulent Operators

Although demand from overseas investors for Cambodian real estate is growing, it is also true that fraudulent operators exist in the market.

Common issues include cases where:

After paying the purchase price, contact with the “responsible company” is suddenly cut off, or
The completed property is significantly inferior to what was originally presented or promised.

In some instances, properties are delivered at a scale or quality far below the pre-sale image.

If sales pitches are overly aggressive or the terms seem too good to be true, it is wise to treat them with a healthy degree of skepticism.

Furthermore, some intermediaries:

Are very attentive until the purchase is completed, but
Provide insufficient support after the transaction, causing serious issues for ongoing property management.

When purchasing a property in Cambodia, you should carefully evaluate whether the intermediary:

Provides adequate after-sales support, including rental management and resale assistance.

4. Losses Due to Falling Property Prices

If the assessed value of a property falls, potential capital gains will shrink and, in the worst-case scenario, you may be forced to sell at a loss.

Some property management companies in Cambodia are careless with maintenance, which can accelerate the deterioration of buildings.

The condition of the property at time of sale has a direct impact on price.
If maintenance is lacking and deterioration is severe, the property’s value declines, reducing potential capital gains.

Location and surrounding environment also significantly influence property valuation.
When purchasing, it is essential to evaluate the property from a holistic perspective, including:

Nearby facilities, and more.

Neighborhood development prospects,

Infrastructure,

5. Losses Caused by Failing to Find a Buyer

High-priced properties are not necessarily easy to sell.
Even if you purchase an expensive property, you cannot realize capital gains if:

You are unable to find a suitable buyer.

Finding buyers solely through personal connections is difficult, and when a property remains on the market:

Ongoing costs such as taxes and management fees continue to accrue.

In such situations, some owners feel pressured and resort to hasty price cuts, which can lead to unnecessary losses.

To sell at a fair and appropriate price, you need support from:

An intermediary with a broad local network and
Strong marketing capabilities.

If you are aiming for capital gains, it is crucial to secure a trustworthy intermediary from the time of purchase, and to plan with the exit strategy in mind from the start.

Capital Gains Tax on Individual Sales May Be Introduced in the Future

As of 2024, capital gains on individual property sales in Cambodia are not subject to tax.
However, there is a growing possibility that such gains will become taxable in the future.

Originally, capital gains tax on individuals was scheduled to be introduced in July 2020, but due to factors such as the COVID-19 pandemic, implementation has been postponed multiple times.

The second postponement decision was made in January 2024, extending the grace period by one year.

Therefore, under the original schedule, there had been talk of introducing a 20% tax on individual capital gains in January 2025.
However, Prime Minister Hun Manet has publicly stated that there will be no tax increases for the time being, and as a result, implementation has been postponed again.

Should capital gains tax be introduced in the future:

Owners currently holding Cambodian properties and considering selling may find that,
If they do not complete their sales before the tax takes effect,
Their net profit will be reduced by the tax burden.

On the other hand, even if capital gains tax is introduced, the key will be to choose properties whose value appreciation outweighs the tax impact, making capital gains still attractive after tax.

Anna Advisors Has a Strong Track Record in Real Estate Sales and Purchases

Since our founding roughly 10 years ago, we at Anna Advisors have been deeply involved in brokering rentals and sales of Cambodian properties.

Our strengths include:

Our representative’s own experience building assets through Cambodian real estate investment, and
Our ability to provide support from a genuine investor’s perspective.

We also operate a local office in Cambodia, where we have built a system capable of providing:

Thorough day-to-day property management, and
A robust backup structure for clients, including on-the-ground support.

Importantly, we do not view our role as ending with simply brokering a purchase.
We believe the true essence of our service lies in:

Providing long-term support, including exit strategies, and
Helping clients build and realize comprehensive investment plans.

Because we can provide immediate, on-site support, we are also well-positioned to assist clients who need to sell Cambodian properties quickly.
If you are considering selling, we encourage you to contact us for assistance.

Conclusion

In Cambodian real estate, one effective approach is to leverage the characteristics of pre-built properties in order to target capital gains.

At present, capital gains on individual sales are tax-exempt, but there is a strong likelihood that they will become taxable in the future.

If you already own property in Cambodia, you may see your profits eroded if you do not complete your sale sufficiently early in relation to potential tax changes.

Our firm operates an office in Cambodia and provides locally rooted services, including daily management.

Because selling Cambodian real estate carries its own risk of failure, we strongly recommend working with a trusted partner.
Please consider entrusting us with your property sale so that you can pursue appropriate, well-structured transactions and secure your capital gains.