Points to Remember While Switching a Property Investment
Jun 14, 2018 Home Trading Steps
Investors often switch from one property investment to another whenever they get a better opportunity for return on investment for a property. A lot of people buy properties at a very nascent stage and normally exit, when the property is ready and the developer is ready to offer possession or when people are moving in or any other instance.
That is investors usually invest during pre- launch stage and exit when the property is ready to get delivered to earn the maximum value or return of the property. But one needs to remember that property purchases should be a long term investment and not a short term. When the markets are not in a favourable condition, the investors should not think about exiting.
So here are some points that investors need to remember while switching the property investment.
That is investors usually invest during pre- launch stage and exit when the property is ready to get delivered to earn the maximum value or return of the property. But one needs to remember that property purchases should be a long term investment and not a short term. When the markets are not in a favourable condition, the investors should not think about exiting.
So here are some points that investors need to remember while switching the property investment.
Tax implications while switching:
if an investor is selling the property within two years of the investment then it will be considered as a short-term capital gain. And the amount received will be considered as an income of the person and treated as per the provisions of income tax of an individual and applicable tax slab. And id the investor exit after two years of investment then it is considered as long-term capital gain tax and would be levied at 20 percent, with indexation.
Investors usually switch to other property investments when there are opportunities for good return. Switching at an early stage might involve smaller tax liability but if the investor waits for the project to get a hold in the market or make the late switch then the investor might need to pay more tax. A smart and well aware investor knows when to switch or exit as their main objective remains to earn more profits.
Investors usually switch to other property investments when there are opportunities for good return. Switching at an early stage might involve smaller tax liability but if the investor waits for the project to get a hold in the market or make the late switch then the investor might need to pay more tax. A smart and well aware investor knows when to switch or exit as their main objective remains to earn more profits.
The ideal time to switch a property investment:
Usually regular investors keep a track of the market and look out for an exclusive deal that offers a good return and encourages them to switch their investment. Therefore one can look for switching investments depending on the prospects of appreciation. An investor should consider investing the gains from one property to another property, in order to avoid paying huge taxes.
What experts’ have to say:
According to the real estate experts, exiting or switching investments only make sense if the alternative investment option is more lucrative. The expected rate of return should be comparatively higher than the existing one, else there is no point in switching.
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