If, at the time of sale, the house is still charged or assigned to a bank of financial institution for the loan granted to assist the purchase of the same, a redemption statement stating the amount due needs to be obtained from the financier concerned. Usually, the redemption of the house is incorporated into the sale and purchase agreement so that part of the proceeds from the sale will be utilized for that purpose.
2. REAL PROPERTY GAINS TAX
All house sellers are required to complete the Form CKHT 1 for Inland Revenue within 30 days from the date of sale and purchase agreement (Section 13 of the Real Property Gains Tax Act 1976). The sale of real property gains tax levied on all house sellers laid down in the Real Property Gains Tax Act as follows:-
- 30% on the profits made for sale within 2 years of purchase; /li>
- 20% on the profits made for sale in the third year of purchase;
- 10% on the profits made for sale in the fourth year of purchase;
- 5% on the profits made for sale in the fifth year of purchase;
- for sale in the sixth year of purchase and thereafter;-
- individual – 0%
- company – 5% on the profits made
Payment of real property gains tax is also normally incorporated in the sale and purchase agreement. Usually the solicitors acting for the seller will act as stakeholders retaining 5% of the purchase price unit payment of the same.
Back to the top