Are you planning to buy a property in Cambodia? If yes, you have two options available. You can buy a freehold or leasehold property in Cambodia.
Whether you are a Cambodian citizen or foreign national, investing in the Cambodia property market is actually a great idea. Over the past few decades, the Cambodia economy performed well, and it was not affected by significant recessions. Hence, real estate in Cambodia is performing well.
Freehold vs Leasehold
When it comes to buying a property, it can be either freehold or leasehold. Freehold and leasehold, both property types have their own pros and cons.
Freehold Property in Cambodia
Before we get into detail, first, let’s understand its basic meaning. Freehold property is any property that is “free from hold” of any entity besides the owner.
Under freehold property, the owner enjoys free ownership for perpetuity. As a freehold property owner enjoys free ownership for perpetuity, he/she can use the land for any purposes; however, it must be in accordance with the local regulations.
As a freehold property owner, you can use it to sell, renovate, or transfer. However, while considering to renovate, sell, or transfer, you need to consider local regulations.
The good thing about owning a freehold property is it has less paperwork and restrictions. Whenever you want to sell your freehold property, there will be no need to get any legal or government consent, and paperwork will also be less.
One of the main reasons why foreign investors are attracted to investing in properties in Cambodia is because they can get freehold ownership. In Cambodia, a foreign national can 100% own a freehold strata title property. Talking about other countries like Vietnam, there, foreigners cannot freehold property; they can only own a 50 years leasehold.
Leasehold Property in Cambodia
Under leasehold property, the ownership of the land on which the property is built is leased to the developer for a specific time. In freehold property, we have seen that the property will be free from the hold of any entity besides the owner.
Talking about leasehold property, this is not the case. The owner of the leasehold property owns the property, but not the land. Typically, the time duration for lease varies from 30 to 99 years.
When a person buy a lease, it could be either a new lease by the freeholder or the existing lease from the previous owner. By owning a leasehold property, you will be charged ground rent, annual services charge, etc. These are charges for buying a property under someone else’s land.
Apart from various charges and rent, there may be different restrictions on leasehold properties. If you want to make some changes, charge the property use, or add an extension to your leasehold property, you will need to ask for the freeholder’s permission.
Due to so many restrictions, charges, etc., leasehold properties may not be ideal for everyone. Restrictions are the reason why most people prefer buying freehold properties rather than leasehold properties.
The good thing about leasehold properties is their cost is comparatively less than freehold properties.
Whether you should own freehold or leasehold property need to be decided after considering various factors. If you are planning to buy house in Cambodia (freehold or leasehold), Dragon Real Estate can help you. It is the best real estate company in Sihanoukville, Cambodia. If you are looking for investing in Thailand have a look at Thailand Property Investments.