Exchange rate set for property taxes

[mrfusion]

Exchange rate set for property taxes


http://www.phnompenhpost.com/index.p...rty-taxes.html

THE Minister of Economy and Fin-ance has fixed the exchange rate for payment of property tax this year at 4000 riel to the dollar, according to a prakas obtained yesterday.

“We have issued this prakas to co-ordinate and make it easier for the Cambodian people to pay property tax,” ministry Secretary of State Ngy Tayi said.

Yesterday, one dollar traded for 4088 riel in Phnom Penh.

The property tax will be levied at 0.1 per cent of a property’s value, provided the property is worth more than 100 million riel, or US$25,000.

Ngy Tayi said this year’s property-tax collection eff-orts, the Kingdom’s first, would assist with establishing a culture of tax collect-ion in Cambodia.

“It is our duty to pay the tax,” he said.

“If we have less, we pay less than if we have much.

“We want to establish a property tax culture and morality, allowing us to collect tax directly in the future.”

Ngi Tayi played down concerns that the property tax revenues could be misappropriated.

“We will be transparent for the Cambodian people.

“We will use the national income generated from the property tax to develop the villages, communes and districts,” he said.

National Valuers’ Association of Cambodia president Sung Bonna said the move to use the riel in collecting taxes would reinforce its use in Cambodia, similar to the decision to require Cambodia Securities Exchange listings in riel.

“I think the purpose of the government is to reinforce the local currency,” he said.

Cambodia Property Limited managing director Cheng Kheng said he hoped revenue generated from the property tax would allow infrastructure such as roads, bridges, schools and hospitals to be built.

Neighbouring countries were collecting property taxes, and the time had come for Cambodia, he said.

“I think that it’s time to begin collecting property tax, but we want the government to be transparent.”

The collection of Cambodia’s property tax will begin in the capital’s eight districts and 26 other cities next month.

[mrfusion]

I wonder who determine the value of a property?

I think this is a good move, the government need to find way to collect tax, and property tax (or just land tax) is a very good source of income.

This will also means developer has to account for this, as it probably means apartments that is not yet sold, still need to pay property tax.

I am not sure what is the point of determine an fixed exhcage rate.

If the property is more then 100m riels, it is very likely to be purchase/sell in US Dollar.

[LostInTheSimCity]

So if the property value worth $2 million, the tax is $2000. Don't u think it is expensive? How about our neighboring countries?

[mrfusion]

Originally Posted by LostInTheSimCity

So if the property value worth $2 million, the tax is $2000. Don't u think it is expensive? How about our neighboring countries?

I think it is expensive, and the government has to start somewhere in its tax system. When the country starts to have a lot of rich people, the country should find a way to benefit from it.

Have you got a $2m property?

[SeeMacau]

The ''property appraiser'' can determine the value of the property, however the result cannot be accurate.

I against the idea of collecting property tax when the country is currently experiencing a quiet outlook in the property market.

[mrfusion]

It is never the right time to start. Everytime you introduce a new tax, people will complain,

So it should probably start cheaper, with a bigger concession, to minimise the effect, yet have people get used to the idea.

[LostInTheSimCity]

Originally Posted by mrfusion

I think it is expensive, and the government has to start somewhere in its tax system. When the country starts to have a lot of rich people, the country should find a way to benefit from it.

Have you got a $2m property?

I don own any property, but those belong to my parents. So we have to pay more than $3000 annually. That's so ridiculous.

How about Taxation in Vietnam? Can anyone confirm?

[SeeMacau]

Perhaps the best approach is to provide tax discount in line with the introduction of property tax. Tax credits can be graned to those who own a number of properties, they can be benefited by paying less tax, and tax reduction can be given to those who pay their tax on time. This would encourage more investments in the property sector and boost up the number of real estate projects in Cambodia

[Asian]

Originally Posted by LostInTheSimCity

So if the property value worth $2 million, the tax is $2000. Don't u think it is expensive? How about our neighboring countries?

$2000 of the $2,000,000 is about 0.1%. I don't think it is expensive at all. Cambodians should start thinking about share sacrifice. Everyone should pay a fair share.

[Asian]

Originally Posted by mrfusion

I think it is expensive, and the government has to start somewhere in its tax system. When the country starts to have a lot of rich people, the country should find a way to benefit from it.

Have you got a $2m property?

Taxing them in a fair share with the rest of Cambodians is a way to go.

[mrfusion]

Originally Posted by Asian

$2000 of the $2,000,000 is about 0.1%. I don't think it is expensive at all. Cambodians should start thinking about share sacrifice. Everyone should pay a fair share.

It is 0.1%, minus whatever is the concession, like the first $25,000 of the property value is not taxed.

And it is not just 0.1%, it is 0.1% pa.

[mrfusion]

Taxes set to reduce transactions
http://www.phnompenhpost.com/index.p...nsactions.html

THE pending property tax could lead to declining residential property transactions in the Kingdom as residents fear rising house prices.

Although the property sector is currently stable after the country’s recovery from the financial crisis, it is expected to stall once the prakas is implemented, VMC Property Company General Manager Dit Channa said.

“Many residents are not fully aware of the regulations relating to tax collection, which could lead to hesitation among purchasers, temporarily dampening the market.”

The taxation will also put pressure on multiple-property owners, especially residential landlords, who may reconsider purchasing further properties, potentially reducing transactions, she said.

“Many owners have already started selling property, but buyers are questioning them over the implications of the proposed tax.”

She added that the government should suspend the implementation of the edict for a year to allow for further recovery in the sector.

Although the prakas is set to come into play next month, some residents claim to have not received a tax form, or any relevant information.

“I know very little about the property tax, so I’m hesitant about buying property in the future, because of the additional burdens I might face,” said Phnom Penh-based car broker Kim Sarin.

“If the taxes are used to develop the country, citizens should abide, however, many people are unlikely to pay, due to poverty,” he added.

Heng Ponreay, assistant director of Company Properties Limited believes that once residents adapt to the new laws, the additional income will be beneficial for the Kingdom.

“People will face difficulties in the short-term, but it will contribute to the development of Cambodia, attracting more foreign investment in the future,” he said.

The property tax will initially focus on the capital’s properties, comprising an annual payment calculated at 0.1 percent of the value of the property, while houses worth less than $25,000 will be exempt from the law, according to the prakas.

[mrfusion]

HE pending property tax could lead to declining residential property transactions in the Kingdom as residents fear rising house prices.

I don't quite follow, if people think house price will increase, isn't it time to buy. This sounds conflicting.

[SeeMacau]

I am thinking the opposite, it should be transactions in the Kingdom as residents fear of ''dropping'' house prices

The first part of the sentence is right, residents fear further drop of housing prices. The average property price has been declining in the past few years and it is time to pick up