Shows the income tax on rent (effective rate, %), the capital gains tax (10 year holding) (%), the roundtrip transaction cost (%), and the gross rental yield (%) of an apartment. For assumptions see below.
- Income Tax on Rent (Effective Rate). We assume the property is directly owned jointly by husband and wife, both non-resident foreigners with no other local income, and they earn gross rental income by letting: €/US$1,500/month. There is no mortgage. Depreciation and capital allowances are taken, if available.
- Capital Gains Tax (Effective Rate). We assume the non-resident couple have owned the dwelling for 10 years at the time of sale; it is their only source of capital gains in the country (but not their sole or principal residence). Worth US$250,000 or €250,000 at purchase, the properly has appreciated in value by 100%.
- Round-Trip Transaction Costs. Includes all costs of a non-resident foreigner buying and then re-selling a residential property worth US$250,000 or €250,000 • registration costs; • real estate agents' fees; • legal fees; • and sales and transfer taxes.