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Capital Gain – How to Maximize Your Profit

Posted by admin on February 23, 2021
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Capital Gain Vs Rental Yield (Investment)

Let’s compare is capital gain or rental yield better.

Tax Rate

Capital Gain from Sale of Property

Generally, the gains derived from the sale of a property in Singapore are not taxable as it is a capital gain.

Rental Yield  Non-owner-occupier Residential Tax Rates (Residential Properties)

Non-owner occupied residential properties may be condominiums, HDB flats or other residential properties. The owner does not live in (“occupy”) the property and, therefore, owner-occupier tax rates do not apply.

The following tax rates apply to non-owner occupied properties except for those in the exclusion list.

Non-owner-occupier Residential Tax Rates
Annual Value ($) Effective 1 Jan 2015 Property Tax Payable
First 30,000
Next $15,000
10%
12%
$3,000
$1,800
First $45,000
Next $15,000

14%
$4,800
$2,100
First $60,000
Next $15,000

16%
$6,900
$2,400
First $75,000
Next $15,000

18%
$9,300
$2,700
First $90,000
Above $90,000

20%
$12,000

Conclusion: Capital Gain have 0% Tax and Rental Yield have 10% to 20% tax for investment.

 

Highest Capital Gain in Singapore Property

The Highest Capital Gain (Annualized) per year I have seen is 13.6%

Highest Rental Yield in Singapore Property

The Highest Rental Yield Residential Property Project in Singapore is getting around 4.7%

Conclusion: The fastest way to get profit is via Capital Gain.

How to Find a Property with High Capital Gain Potential?

What are the options available?

Resale HDB $840k =>$710k
After 7 years Made a Loss of $130k

BTO HDB $400k => average $550k
After 3 years of construction and 5 years to MOP (Total 8 years) get 37.5% gain (37.5% / 8 years = 4.68%) or $150k gain ($150k /8 years= $18.75k / year)

Resale Condo After 6 years psf range drop from $900+psf to 800+psf

New Launch Condo  $1,072,398 =>$1,469,946
After 4 years Made 7.6% per year and $398,000 ($398,000 / 1582days X 365days = $91,826 / year)

Summary: 
Resale HDB $840k =>$710k After 7 years Made a Loss of $130k
BTO HDB $400k => Average $550k After 8 years Made 37.5% gain (37.5% / 8 years = 4.68%) or $150k gain ($150k /8 years= $18.75k / year)
Resale Condo After 6 years psf range drop from $900+psf to 800+psf
New Launch Condo $1,072,398 =>$1,469,946 After 4 years Made 7.6% gain per year and $398,000 gain ($398,000 / 1582days X 365days = $91,826 / year)

Conclusion: New Launch Condo have the highest potential capital gain in terms of Percentage and Quantum. 

 

Which New Launch Have Higher Chance for Capital Gain?

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