Condos Above Ground Floor, With a Real Title Risk
Foreigners cannot own land in Cambodia under any circumstance. Under the 2010 Foreign Property Ownership Law, Americans can own condominium units above the ground floor outright via strata title, capped at 70% foreign ownership per building. The single biggest risk in Cambodian property isn't the ownership cap itself, it's the difference between hard title and soft title.
The 70% Foreign Ownership Cap
Across an entire condominium building, foreigners may own up to 70% of total units, ground-floor units are reserved for Cambodian citizens only. Confirm a building's current foreign ownership percentage with the developer or building management before signing a reservation agreement, projects popular with foreign buyers can approach the cap faster than expected.
Hard Title vs. Soft Title: The Real Risk
Hard title is registered nationally and represents the most secure form of property title available in Cambodia. Strata title for condo units, when properly issued, functions similarly for foreign ownership purposes.
Soft title is registered only at the local commune level, a genuinely weaker form of documentation that offers considerably less legal protection. Foreign buyers should insist on hard title or properly issued strata title and treat any soft title offer as a serious warning sign, not a minor paperwork distinction.
Landed Property Workarounds
For those wanting landed property rather than a condo unit, the established legal workarounds are a long-term leasehold (up to 50 years, often renewable) or setting up a Cambodian-majority-owned company structure, both requiring careful legal structuring rather than informal arrangements.
US Reporting on the Purchase and Rental Income
The purchase itself isn't a US reportable event, but the Cambodian bank account used to fund it counts toward FBAR and FATCA thresholds. If you rent the unit out, that income is reportable on Schedule E of your US return regardless of Cambodian tax treatment, with US depreciation rules applying rather than Cambodian ones.
Worked Example: A Phnom Penh Condo Purchase
An American buys a $95,000 condo unit on the fourth floor of a Phnom Penh development, confirming with the developer that the building's foreign ownership sits at 45%, well under the 70% cap, and insisting on genuine strata title rather than accepting any soft title shortcut offered informally. She rents the unit out for $500/month. The rental income is reportable on Schedule E on her US return, with real, defensible property rights backing the investment.