How much do you earn from buying and selling houses? Teach you how to calculate the sales account

        In recent years, housing prices have skyrocketed. Assuming a house is bought for NTD 25 million and sold for NTD 30 million, it appears to have earned NTD 5 million on paper. However, the actual profit can only be determined after deducting tax and transaction related costs. Therefore, before trading, it is necessary to take inventory of property rights, tax burden, funds, and future needs, and calculate the total "account" in order to truly enjoy the value-added benefits brought by assets.

        Before selling the house, please confirm: What tax method is applicable?

        Both are selling houses, because the time of acquisition of the subject matter is different, and the applicable tax system is also different. Since the implementation of the real estate integration tax in 2016, according to Article 14-4 of the Income Tax Law, the sale of real estate must be taxed separately at a rate of 15% to 45% based on the holding period; As for houses acquired before 2016, most of them are subject to the old system. According to Article 14, Paragraph 1, Category 7 of the Income Tax Law, the income from house transactions is included in the comprehensive income tax declaration.

        Due to the different tax logic between the old and new systems, the seller should first confirm which set of tax rules are applicable before signing the contract, estimate the possible tax burden involved, and then grasp the actual income situation. (Table 1)

        Table 1

                Data source: Global Information Network homepage of the Ministry of Finance>Theme section>Real Estate Integration Tax 2.0>Reform focus, Ministry of Finance Tax Portal homepage>Foreign Tax Services>Personal Housing and Land Transaction Income Tax Declaration (Real Estate Integration), Far Eastern International Bank reorganization; Actual application should still be subject to individual transaction conditions and the latest regulations

        Why is the tax rate different when it is clearly self occupied?

                Many people intuitively think: "This is my own house, which belongs to my own house, and the tax rate must be low." But in fact, the registered residence, holding period, housing use and other legal conditions of the house may affect the eligibility for preferential treatment. In terms of land value-added tax, those who meet the relevant conditions for self use residential land can apply a preferential tax rate of 10%; The tax on the integration of real estate and land is applicable to those who meet the relevant conditions for their own residential land. The taxable income up to NTD 4 million is exempt from tax, and the excess is calculated at 10%.

        For example, some families adjust their registered residence due to school district or family arrangements, or have rented their houses for business use. When selling their houses, tax conditions may be affected. It is recommended to clarify each item before selling to avoid losing the benefits that could have been enjoyed due to disqualification.

        In addition, if you are selling your house to exchange for a more suitable one, don't forget to pay attention to the discount of "repurchasing a self use residence". Those who meet the criteria and complete the "buy first, sell later" or "sell first, buy later" policy within 2 years can apply for tax refunds or deductions for land value-added tax or integrated real estate tax. However, the applicable conditions, application deadlines, and calculation methods for the two are not exactly the same, and it is still necessary to confirm whether they comply with the regulations before actual transactions.

        How much can the house be sold? It's better to calculate how much is left in the end first

        From the tax burden and transaction costs when selling a property, to how the funds will be used after the sale, and even the future inheritance of assets, every link may affect the final value created by this asset. Especially for high asset families, it is necessary to consider various aspects such as overall asset allocation, taxation, law, and inheritance. Far Eastern International Bank's family office can integrate professional resources to assist you in looking from a 'single asset' to a 'full asset', making every wealth more closely aligned with the family's arrangements and ideas.

        If you want to learn more about buying and selling real estate, please scan the QR code and listen to the wonderful program EP55 "Survival Guide for Buying and Selling Houses" on the podcast "Ten Joys Without Money in Life"! What tax misconceptions have you fallen into? "And practical tips for real estate transactions.

                *Image source: Magnific

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