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Property income tax

What is property income tax?

Income from the sale of land is generally subject to property income tax. This is a special form of income tax. A special tax rate of 25 per cent applies. Where property gains tax applies, income from the sale of land does not increase the tax rate on the remaining income. The tax base is generally calculated as the difference between the proceeds of the sale and the original acquisition cost. For properties acquired before 31 March 2002 (or, in exceptional cases, before 31 March 1997), the following applies: the acquisition cost is generally set at a flat rate of 86 per cent of the proceeds of sale; in the event of the land being rezoned as building land or development land after 31 December 1987, the acquisition cost is generally set at a flat rate of 40 per cent of the proceeds from the sale.

In particular, income from the sale of owner-occupied houses or flats, including the land on which they stand, is exempt from taxation, provided that they have served as the seller’s principal residence continuously for at least two years from the date of acquisition and the principal residence is being relinquished, or have served as the seller’s principal residence continuously for at least five years within the last ten years prior to the sale and the principal residence is being relinquished.

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