Is the Profit Made from Buying and Selling Property Subject to Company Income Tax?
Generally, the gains derived from the sale of a property in Singapore are not taxable, as it is considered a capital gain.
When a person is deemed to be trading in properties, the gains from the sale of properties in Singapore are considered taxable income. Whether a person is deemed to be carrying on a trade will depend on individual circumstances.
To determine if a person is trading in properties, IRAS applies a set of guidelines known as the “badges of trade”. IRAS considers the facts of each case against the criteria of the “badges of trade” to determine whether the gains are taxable.
Examples of these criteria are as follows:
Frequency of transactions (buying and selling of properties);
Reasons for acquiring and selling of property;
Financial means to hold the property for the long term;
Holding period (a period greater than five years is normally considered as a long term investment);