What Is Property Valuation For Capital Gains Tax Purposes?
A capital gain is defined as the profit or financial gain made on an asset that has been sold or disposed of. It is calculated by determining the difference between what you pay for a property and what you get for it when you dispose of the property. Normally, you will be mandated to pay a capital gains tax on capital gains made on a property you make a profit from when you sell or dispose of it. Both individuals and entities are liable to pay a capital gains tax.
Why is property valuation necessary for capital gains purposes?
The market value of the property is a crucial component when calculating the capital gains tax on a property. A property valuation is needed to provide reliable information on the worth of the property and is especially useful to avoid situations where an individual or entity is charged much higher or lower taxes than they should be liable for.
When would I need a valuation for capital gains tax purposes?
Ordinarily, it’s the price at which you sell the property that will be used to calculate capital gain and in turn, capital gains tax. However, in some situations, you will need to use the market value of the property instead, hence the need for a property valuation.
To instantly book a valuation for tax purposes, click here.