One of the major cost for property investment would be taxes. And to allow young investors to tabulate the risk accurately, I've list out 5 different taxes that we need to pay attention during our investment journey. First would be RPGT (real property gain tax) where the tax is imposed on gains we get from the investment. This is one of the key measures that our government use to control the real estate market and the rates are revised almost every year. A tip is to declare RPGT yourself and you can deduct out fees such as legislative fees, agent fees, renovation cost and etc to save on tax. If you fail to make gains from your property investment, then you don't have to pay.
Next would be income tax where you are gauge and evaluated before the banks decide to provide you with the loan facility. I strongly encourage young investors to focus on increasing your income for year 2020. Some self employed business people may choose to avoid paying income tax, later finding that their income declaration becomes a hindrance for them to get financing for the bank. Another 'luxury problem would be when serial property investors sell too many properties too fast and the Inland Revenue Board impose the income tax tariff of 24% on their gain instead of the 5% RPGT.
Following would be the buzz word of 2019, stamp duty which is used in transfer instruments such as SPA (Sales & Purchase agreement), MOT (memorandum of transfer), loan agreement as etc.
For property assessment and quit rent paid to local council and local state government separately must be considered if you're planning to hold the property for a longer duration of time.
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