Quote:
Originally Posted by Subbu
I am planning to invest in Chennai and make few bucks in the rising real estate market. Basically planning to start off by constructing one building with 6 apartments and sell them off, but am not sure which is the right place to buy the land and start the construction. Appreciate all for your time in advance.
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Subbu,
I had similar ideas. One of the issues that bothered me was how would you handle the money and taxes? Let me explain what iam talking about
Let us say(all the numbers are hypothetical and simplified my calculation)
Cost of land - 20L
Cost of construction(6apts@500sqft each-say 700Rs/sqft) -21L
Total cost = 41L
When you sell the apartments assuming you get 10L each
Total revenue=60L
Profit = 19L and you would have to pay taxes for it. Not only this, even though you had paid 20L for the land, the registered value might be just 5L, which means Your total cost on paper will be 26L.
So you have to pay more taxes since your profit will be higher(on paper).
Have you thought about this issue? Can someone clarify this?