Expenses that might erode your income from Property Selling
Selling a property, can reap huge benefits, but due to the wrong timing it can also have a lot of downsides. It is essential and often rewarding to re-consider the decision of selling your property and have a talk with a real estate expert. Also, before putting the home for sale be sure that you have done enough market research and the price of your is getting the expected rate of return. Many a times we overlook a lot of expenses and overestimate the return we will get on selling a property.
To solve this problem MakaanIQ brings a list of expenses on which you must think upon before selling a property
Income tax department considers property to be an asset. Any profit you earn by selling it, attracts a capital gains tax. If it is held for less than 3 years, it attracts a short term capital gains tax, which is charged at higher rate than long term capital gains tax, which is applicable after 3 years.
Duties and Brokerage
If you have bought a property one has to pay various duties like stamp duty, registration fees, brokerage. As a result, the cost price will go up. Moreover, if one has employed a broker one has to pay a brokerage to sell the property, the profit would be reduced further.
If on is buying a second property one has to pay wealth tax, which was 1% of the total wealth. Ultimately one will be forced to pay wealth tax, thus eroding the value of the overall investment.
While you remained invested in his property, the stock markets might have reached new highs. Now the returns from stock market are much higher than the returns from property. Besides the holding period for stocks is just 1 year after which long term capital gains tax sets in. One might lose the opportunity to earn high returns from stocks.