Cambodia Inheritance Tax: What Foreign Heirs Actually Pay
Cambodia Inheritance Tax: What Foreign Heirs Actually Pay
Cambodia does not levy a dedicated inheritance or estate tax. That is the good news. The complication is that transferring and disposing of inherited property triggers several other taxes that can add up to a significant liability.
Transfer Tax (Stamp Duty): 4%
A flat 4% transfer tax applies whenever real estate changes ownership — including through inheritance. The tax is calculated on the assessed property value as determined by the Department of Taxation, not the market price or the sale price.
This applies to both strata-titled condominiums (which foreigners can own directly) and land transfers processed through the cadastral office. The heirs pay this tax when registering the inheritance at the Cadastral Administration.
Annual Immovable Property Tax: 0.1%
Property owners in Cambodia pay an annual tax of 0.1% on real estate valued above approximately $25,000 (KHR 100,000,000). When an heir inherits property, they inherit this ongoing obligation as well.
For foreign heirs who inherit land and are subject to the Article 1155 three-month sale requirement, this tax may only apply for the brief period before the property is sold. But for strata-titled condominiums that foreign heirs can retain, the annual tax is a permanent recurring cost.
Capital Gains Tax: 20%
Cambodia enforces a flat 20% tax on capital gains, but the implementation follows a split timeline:
Real estate (land and buildings): Under Instruction No. 041 from the General Department of Taxation, CGT on immovable property has been officially deferred until January 1, 2027. This means inherited real estate sold before that date is not subject to capital gains tax.
Other capital assets: Effective January 1, 2026, CGT is fully in force for five transaction categories including the transfer of company shares and the assignment of long-term lease rights. If an estate transfers shares in a property-holding company or sells a registered long-term lease, it faces an immediate 20% CGT liability.
This distinction matters enormously for estates with property held through land holding companies (the 51% Khmer / 49% foreign corporate structure). Selling the company's shares triggers CGT now, while selling the underlying real estate directly may not — until 2027.
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What This Means for Different Property Types
| Property Structure | Transfer Tax | Capital Gains Tax | Notes |
|---|---|---|---|
| Strata-titled condo (foreign-inheritable) | 4% at registration | Deferred until 2027 for real estate | Cleanest scenario for foreign heirs |
| Land/villa (must sell within 3 months) | 4% on sale | Deferred until 2027 | CGT deferral helps forced-sale scenarios |
| Land holding company shares | N/A (share transfer) | 20% effective now | CGT applies to share transfers since 2026 |
| Long-term lease assignment | N/A | 20% effective now | CGT applies to lease right transfers |
Real Estate Due Diligence
Before accepting an inherited property — especially one with a soft title registered only at the local Sangkat level — professional due diligence costs approximately $650 and is highly recommended. Soft-title properties are prone to boundary disputes with neighbors, and accepting an asset with unresolved title issues can create more liability than value.
The Cambodia Expat Death Guide includes a complete tax reference for each property ownership structure, plus the document requirements for registering an inheritance at the cadastral office.
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