Cambodia’s real estate sector has been handed another lifeline: the 20% capital gains tax on property — originally scheduled to take effect this month — has been pushed back by a full year to January 2027, giving a battered market more time to recover.
Prime Minister Hun Manet signed off on the postponement on December 24, 2025, which was formally confirmed by the General Department of Taxation on January 2nd. For a sector that has spent the past year grappling with tight liquidity and excess inventory, the news arrived as a meaningful relief. (Source: The Phnom Penh Post)
What has — and hasn’t — changed
The delay comes with an important caveat: it applies only to immovable property, meaning land and buildings. All other asset classes included in the original tax framework went live as planned on January 1st. Leases, stocks, bonds, intellectual property, goodwill, and foreign currency transactions are now subject to the levy. (Source: DFDL Legal & Tax)
Anthony Galliano of the American Chamber of Commerce in Cambodia (AmCham) views the decision as strategically well-considered. In his assessment, the extension gives the General Department of Taxation additional time to build public awareness while allowing the property market to stabilise before a new financial burden is introduced. (Source: The Phnom Penh Post)
Breaking down the 20% rate
While a 20% CGT headline rate may sound steep, the effective burden is considerably lighter in practice, depending on how sellers choose to calculate their costs. (Source: IPS)
There are two available approaches. The first is a simplified method: the government permits sellers to automatically deduct 80% of the total sale price as an allowable expense, with no supporting documentation required. Tax is then applied at 20% only on the remaining 20% of the sale price — resulting in an effective rate of just 4% on the total transaction. This route is straightforward and predictable.
The second option is an itemised method suited to sellers who have maintained thorough financial records. Those who can document actual costs — including the original purchase price, renovation expenditure, and registration fees — may deduct these directly. The 20% rate then applies to the net profit after deductions. For sellers whose real costs exceed the automatic 80% allowance, this approach can yield a lower overall liability. (Source: IPS)
Why the timing matters
Cambodia’s property market has endured a difficult couple of years. Foreign investment slowed considerably, unsold residential and commercial stock accumulated, and prices softened across key segments. Many analysts now believe the market may have reached its floor, creating an opening for value-oriented buyers.
Against that backdrop, introducing a new tax obligation would have risked undermining what fragile momentum exists. The one-year deferral eliminates that pressure point and provides property owners with an additional window — twelve months — to reassess their positions, complete transactions, or make strategic exits before the regime takes full effect. (Source: Property Asia)
Pattern of pragmatic delays
This is not the first time the CGT has been deferred. The policy has been in development since 2020, and each postponement has reflected a deliberate approach — allowing the market to stabilise while the administrative infrastructure required to implement and enforce the levy is properly established. (Source: PwC Tax Summaries)
A look ahead
With January 2027 now set as the firm implementation date, buyers, sellers, and developers have a defined timeline to work with. For those active in the Cambodian property market, the next twelve months represent both a window of opportunity and a period in which to prepare for the landscape ahead. (Source: Orbitax)
This section is intended as analytical commentary and does not constitute financial or investment advice. Readers should conduct independent due diligence and consult qualified legal and financial professionals before making investment decisions.
