Last updated: April 26, 2023
Do you know why real property gains tax was introduced? RPGT was introduced to reduce the spiralling of selling prices. Tax rate of the property of sale corresponds to the holding period of the property. For instance, if one holds on to the property for five years and above, the lower the tax rate one will be charged when they finally sell the property.
There was a need to curb this as RPGT could reach a point where there were zero tax rates. Being bad for the economy and many people taking advantage of this, governments had to instil measures and policies to ensure people get taxed whenever they sell the property.
Since then, the government has continued to revise the set policies to ensure they continue to tax people selling property effectively. However, if one sells property at a loss, no tax will be charged as there are no gains.
Note that property tax gain is not taxed on someone’s income but taxed on a person’s revenue. It is taxed on the selling of property among residents, non-citizens and companies of a given country. Besides, property gains tax is charged to someone who sells, transfers, or assigns their property to another person under the real estate law.
If you’re interested in this phenomenon, please take a look at the following infographic. It shows the latest research into how taxes on the sale of property are calculated. The infographic makes it easy to understand this concept and provides an insight of those who receive an exemption from paying taxes when selling property.
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