Freehold vs leasehold in Cambodia: ownership versus a long-term lease

In listings the two words sit side by side and look almost the same: either way you are "given an apartment". The difference is what exactly you are buying. Freehold is ownership of the property, not limited by a term. Leasehold is the right to use the property for the term of a contract, after which the right ends unless it has been renewed. That decides both the price and what you will be able to sell five years from now.

The difference in short

Freehold: what exactly you get

In an apartment building, freehold for a foreigner is structured through a private unit — a separate space inside a co-owned building that can be held in personal ownership. The document for such a space is called a strata title, the title of an individual unit: it confirms that the specific apartment belongs to you, while the common areas are used jointly with the other co-owners.

It matters just as much to understand what this right does not include. The land under the building does not pass into a foreigner's personal ownership: a strata title relates to the unit, not to the plot. The plot and the building as a whole sit under the master title — the title of the land or the project, held by the landowner or the developer. In a building under construction the titles for individual apartments have not yet been split out of the master title, so during construction you buy under a contract and the unit title appears later.

Foreign ownership of units is capped: the apartment must be above the ground floor, and total foreign ownership in a building cannot exceed 70% of the aggregate area of all private units — the restriction set by Sub-Decree No. 82. The quota is counted by area, not by number of apartments, and in a popular building it may already be used up. Check it before you pay anything.

Leasehold and the perpetual lease

Leasehold is a lease, however long it runs. The title stays with the owner, and you get the right to use the property for the term written into the contract — usually together with the right to sublet it, to sell your right of use and to pass it on, provided that is spelled out.

The term perpetual lease is often presented on the market as an "endless" lease. Legally it is still a lease with a term: the word "perpetual" describes the renewal mechanism, not the absence of a term. A promise of perpetuity has to be checked against the contract text, not against the presentation.

Leasehold appears where freehold is unavailable or impossible for a foreigner: a landed house, a villa, a commercial property on a plot, a ground-floor apartment, a building whose foreign quota is used up. It is a legitimate and workable format, but it calls for closer reading, because all of your protection sits inside the contract.

Registration: the pivotal point

Title registration means entering the right into the official records, after which it is visible to more than just the parties to the deal. For freehold that means issuing and transferring the unit title into your name. For leasehold it means registering the lease itself.

The difference between a registered and an unregistered right becomes obvious exactly when a dispute arises: the owner sold the property to a third party, the plot turned out to be mortgaged, heirs made a claim. An unregistered contract protects you less in that situation. So the question "will my lease be registered, by whom, when and at whose cost" is asked before signing, not after.

Separately, check the property against the official records: do the area, the floor, the unit number and the owner details match the contract, and are there encumbrances on the property. How to read the records and what kinds of titles exist is covered in our guide to the property registry and official records.

What to check before the deal

If you are offered freehold:

• Whether a strata title exists for the specific unit or is only planned, and at what stage the issuance is.
• Whose name is on the title now, and whether it matches the seller under the contract.
• Whether the foreign quota in the building is still open on the date of the deal.
• The floor the unit is on and its status as a private unit.
• Whether there are encumbrances on the project's master title.
• Who handles the transfer of title after payment, and within what deadline.

If you are offered leasehold:

• The exact lease term and the date it runs from.
• The renewal mechanism: automatic or by agreement, at what price, who decides.
• The right to transfer the lease to a third party — without it you cannot "sell" the property.
• Inheritance of the right of use.
• Registration of the contract: by whom, when, at whose cost.
• Who owns the plot, whether it is mortgaged, and what happens to your lease if the owner changes.

What happens to the lease if the land is sold

Article 246 of the Civil Code gives registration a precise effect. If ownership of the leased immovable is transferred, a registered perpetual lease can be asserted against the new owner. An unregistered right is treated differently: the Code refers it to the general perfection rules for leases only for a period of up to 15 years, which is not the same as preserving a long registered term in full.

The registration date should also be checked against mortgages and other recorded rights. Prakas No. 30 states the general rule that priority over the same immovable follows the chronological order of registration unless another rule applies. A lawyer should therefore verify both the existence and the ranking of the lease entry.

• What you pay on top of the rent: maintenance, taxes, repairs.

Who keeps buildings and improvements when the lease ends

Article 254 of the Civil Code addresses the end of a perpetual lease. The lessor cannot require restoration to the original condition unless the lessee destroyed the immovable or fundamentally changed its nature. At the same time, the lessor may acquire improvements and structures installed by the lessee without paying compensation.

The parties may agree on a different outcome, but a special agreement must be registered if it is to be asserted against third parties. For a villa, a building on leased land or an expensive fit-out, the lease should distinguish permanent improvements from removable equipment and state removal rights, compensation and the required hand-back condition.

How it affects price and exit

The main practical consequence: a leasehold is an asset with a shrinking term. The fewer years remain, the narrower the buyer pool and the stronger the pressure on price. Freehold has no such built-in decay — its value depends on the market, the building and the district, but not on the calendar of a contract.

Hence a simple test when comparing two offers: count not only the price per square metre, but also what you will be able to show a future buyer. For freehold that is the unit title. For leasehold it is the remaining term and the renewal and transfer terms written into the contract. If renewal is described as "by agreement of the parties", with no price and no obligation on the owner, then years later it may turn out to be not a right but a request.

Both formats work. The problem is not leasehold as such, but leasehold bought on freehold terms: at an ownership price and without reading the contract.

Frequently asked questions

What is the difference between freehold and leasehold in plain words?

Freehold is ownership of the property itself, not limited by a term: you own the apartment as a private unit, you can sell it and pass it on, for as long as the building stands. Leasehold is the right to use the property for the term of a lease; the title stays with another owner, and when the term ends the right of use ends too unless the parties have renewed. Hence the main difference in price: the value of a leasehold depends on the remaining term and the renewal terms, the value of a freehold does not.

Can a foreigner get freehold in Cambodia?

Yes, but not for everything. A foreigner may own a private unit in a co-owned building and hold a strata title over it. The unit must be above the ground floor, and total foreign ownership in a building is capped at 70% of the aggregate area of private units — the restriction set by Sub-Decree No. 82. A foreigner does not take personal ownership of the land under the building. That is why, where freehold is not available — for a landed house, for example — the market offers a long-term lease instead.

What is a perpetual lease, and is it really perpetual?

Perpetual lease is the market name for a long-term registered lease that marketing often presents as endless. Legally it is still a lease with a term: it grants a right of use, not a title. Look in the contract itself for the term, the renewal procedure and price, the right to transfer the lease to a third party, inheritance, and whether the lease is registered in the official records — an unregistered lease protects you less. A single statutory maximum term for such leases, binding on every contract in Cambodia, is not confirmed in this review.

What matters more before buying: the title or the contract?

Both, in different order. When buying freehold the key points are whether a strata title exists for the specific unit or is only planned, and whether the foreign quota in the building is still open; in a project under construction the unit title is usually not yet split out of the master title. When buying leasehold the key point is the wording of the lease: term, renewal, transfer, registration. In both cases check the details against the official records and have an independent lawyer review the documents before you pay anything.

Sources

NovAsia corpus on ownership and titles · practice supporting transactions in Phnom Penh · checked July 2026. The 70% cap on foreign ownership of the aggregate private-unit area is cited per Sub-Decree No. 82. Not confirmed in this review and to be verified against the specific contract and the official records: the maximum term of a long-term lease and its renewal procedure, whether registration of a lease is mandatory, the timing of strata title issuance in a given project, and the effect of a change of landowner on an existing lease. This content is for general information only and is not legal advice — consult an independent lawyer before a deal.