As many people know, real estate is a great investment. This post will highlight how much profit can be multiplied in this field of investments. This means that if you are looking to make more money on your investment, it may be best to invest for a longer period of time and wait for your profits to grow.

For most people, after Real Estate Investment ROI is thought of as a percentage, but for our purposes of figuring out “how much,” we will have to analyze the math. The formula for ROI is straightforward enough-ROI = (profit/investment) x 100%. If I own a piece of real estate that earns me 10,0000 per year in profit and I bought it for 1,000,000 then my ROI would be 10% (100k/1000k). That’s great! Congratulations on your recent purchase. Unfortunately, that’s not where the story ends.

Tax is what makes the country going! The tax is the amount used for the welfare of the citizens. So, are you paying your taxes?

If you want the economy and country to stabilize all you need to do to contribute is to start paying your taxes timely!

Being a responsible citizen, we must pay taxes timely. The paid tax ensures our economic stability. Most people hide their properties in order not to pay tax, which is quite wrong. The property is assets of your country, and while you obtain it, you are required to pay the tax honestly. The tax, in return, is utilized for the well-being of the country.

The property tax is the amount in the form of money that an owner has to pay. The tax is paid to the government. The taxes help the government to function financially. The amount is utilized in various areas, i.e.: It is used to build infrastructure, increase the required imports, and pay the salaries of people, etc.

The tax year starts from 1 July to 30 June of next year, i.e., The property tax, which starts from 1 July 2020, will end on 30 June 2021.

Capital Gains Tax

The Capital Gain Tax is a sibling to Capital Value Tax. It is the amount that the seller has to pay to the government. The amount is paid at the time of selling the property. The tax applies to the property of the sellers. The tax chart changes every year. After three years, the seller is obliged to pay the Capital gain tax. Whereas the first-year tax is 10%, the second year it comes down to 7.5%, and in the third year, it’s 5% only.

Capital Value Tax

As per the Finance Act 2006, the person who buys any property will have to pay Capital Tax Value. It is 2% of the total recorded amount. The amount is paid to the government while buying the property. The documentation of the property also has the capital Value Tax. It is 3% of all the legal documentation called ‘Stamp Duty.’

Withholding Tax

The withholding tax is a fusion of Capital Gain Tax and Capital Value Tax. It is the amount which is paid by both the buyer and the seller. It is paid when the property is finally sold.

As per the Tax percent, both the parties have to pay withholding tax. If the property is filed on income tax by the buyer, it remains 2%, but if the buyer is a non-filer, the tax rises to 45%. The huge increase ensures that property buyers should become tax filers. The same is for the sellers. If they are a filer, they have to pay 1% of tax, but if they are non-filer, the tax will charge as much as 25% withholding tax.

Whatever return you get will be after cutting of the taxes in your original Real Estate Investment.