“Don’t wait to buy real estate, Book your dream home with the best investment plan ever!!” We normally hear these sayings when it comes to real estate investment such as 3 BHK premium apartments in Bangalore. Buying a property is a big decision. But, over a period of time, one finds it difficult to decide whether to sell it or retain it. It is either maximizing the profit of the best real estate investment or diminishing the gains when one plans to switch a property investment. If you sell your property too early you can miss the future boost for the property and capital growth in the future. However, if you sell it too late, your property loses its best price and you can miss the chance of a better investment value! There are many things one should consider when it comes to Switching Property Investment for Maximum Benefit.
When should you switch property investment?
Just think and try to get the solutions for the below questions one should have while opting for real estate investment.
- What is the investment plan for your money?
- What return are you getting?
- What return can you expect in the future?
- If you take out the investment then what are the other options?
- What are your financial goals?
Once you are clear with the answers, it will help you make a decision whether you should keep your property or move on.
Tax Implications while Switching a Property.
- If you sell a property within 2-3 years of buying it, the capital gain on the investment will be taxable. It will be normally considered as a short-term capital gain. The amount will be added to the taxable income of the individual and the applicable tax rate will be applied.
- If the investor quits, after two years of making the investment, it will be considered as a long-term capital investment. The tax on the property will be 20% after indexation. The term indexation means that the inflation during the holding period will be taken into account and accordingly the purchase price is adjusted.
- So, if you switch a property investment at an early stage, the tax liability will be more. While, in the case of long-term capital gains, your property will be taxed at 20%. In addition, to the case of long-term capital gains, you can also benefit from various other exemptions like expenses incurred on repair, renovation, and interest paid during the pre-construction period. You should consider both the projections.
What is the Ideal Time to Switch?
The ideal time for switching an investment property is when you are getting the best deal. Alternative investment should be a favorable one, giving you a high rate of returns as compared with the existing one. Otherwise, it is better to wait and then switch. Buying and selling should be a profitable deal working in your favor.