How to calculate capital gain

To calculate capital gain from the sale of a property in Singapore, you need to consider the following steps:

Determining Capital Gain

• Selling Price: Note the amount you received from the sale of the property.
• Purchase Price: Record the original price you paid for the property.
• Additional Costs: Include any additional costs associated with the purchase and sale, such as stamp duties, legal fees, and renovation costs.
• Capital Gain Calculation: Subtract the total purchase price (including additional costs) from the selling price to determine the capital gain.

Example

If you bought a property for $1 million and sold it for $1.5 million, and you incurred additional costs of $50,000 (e.g., stamp duties, legal fees), the capital gain would be calculated as follows:

• Total Purchase Price: $1,000,000 + $50,000 = $1,050,000
• Capital Gain: $1,500,000 - $1,050,000 = $450,000

Tax Implications

In Singapore, capital gains from the sale of a property are generally not taxable if it is considered a personal investment. However, if the gains are derived from trading in properties (i.e., buying and selling properties with a profit-seeking motive), they may be taxable. You would need to declare such taxable gains under 'Other Income' in your Income Tax Return.

For more precise calculations and to assess whether your gains are taxable, you can use tools available on EdgeProp, such as the Edge Fair Value tool, which helps in evaluating the fair value of a property, and other research tools that provide data on past transactions and price trends.