Capital Gains Tax On Property – Law, and Regulations

Investing in property is one of the best and most secure ways to raise your profit. Capital gains tax is a tax on profit paid when something with an increased value is sold. Some of the assets you sell are tax-free while the others are not. Typically, capital gains tax is calculated by means of deducting the cost of obtaining and holding an asset. Capital gains tax on property is paid when you sell more than one house you own. If this is your only home, you are exempt from the capital gains tax on property in the majority of the countries.

Capital Gains Tax on Real Estate – Worldwide Rates and Laws of Purchase

The rate of capital gains tax on real estate depends on the country. The legislation that regulates capital gains tax on a property can be rather complicated. First of all, the rate of the capital gains tax on real estate depends on your income. There are two types of taxpayers according to the classification applied worldwide – primary tax bearers and higher-rate tax bearers. Primary tax bearers are normally expected to pay 18% real estate capital gains tax while in case of higher-rate tax bearers, capital gains tax property will comprise 28% (figures valid in the UK.)

The same refers to capital gains tax on rental property. Capital gains tax, in this case, can be from 15% to 20% depending on your income (figures valid in the US.) However, there are places where residents of the country are exempt of capital gains tax on property. The United Arab Emirates are one of them. Property capital gains tax is not levied here.

Capital gains tax on houses and its calculation can be complex. If you have any questions concerning its rate and the way it is estimated, it is better to entrust a group of professionals with the task of calculating it rather than do it yourself. If you sell property in the country where capital gains tax on real estate is levied, a team of professionals can help you learn more about the opportunities to reduce it and other tax exemption tools.

Please, note that there is a notion of “private residence relief.” This is applicable when you’re selling your main home. However, if you are selling several houses, one of them can still be appointed for private residence relief. It will be tax-free, so it makes sense to choose the one that will bring you the highest profit.