RES exam question on Taxes & Duties: Mr Chua has bought and sold five condominiums in three years, holding each for under…
Mr Chua has bought and sold five condominiums in three years, holding each for under a year and buying mostly on bank loans. IRAS writes to ask about his gains. His salesperson looks up how IRAS treats gains from selling property. (i) Gains on a Singapore property sold within three years are taxed as capital gains at a flat 10%. (ii) The frequency of his transactions and his holding periods are among the factors IRAS weighs. (iii) Whether he had the financial means to hold the properties for the long term is also weighed. (iv) Gains found to be taxable go in a separate 'Capital Gains' section of his Income Tax Return. Which of the statements above is/are correct?
- A(i), (ii) and (iii) only
- B(ii), (iii) and (iv) only
- C(ii) and (iii) only
- D(i) and (iv) only
Show answer & explanation
Answer
C. (ii) and (iii) only
Explanation
Answer: (ii) and (iii) only. Singapore has no capital gains tax. IRAS weighs factors such as frequency, holding period and financial means to decide whether gains are taxable.(ii) True. The frequency of transactions and the holding period are both on IRAS's list of criteria.(iii) True. The financial means to hold the property for the long term is one of IRAS's criteria.Watch out: Quick sales do not trigger a capital gains tax. They may show he is trading in properties, which makes the gains taxable income.Rule: Gains from selling property in Singapore are generally capital gains and not taxable. They may be taxable where a person buys and sells with a profit-seeking motive or is trading in properties, judged on frequency, reasons for buying and selling, financial means and holding period.Source: IRAS, Gains from Sale of Property (read 1 Oct 2026)
Why the other options are wrong
- (i) False. Singapore has no capital gains tax, at 10% or any rate. Gains on selling property are generally capital and not taxable.
- (iv) False. There is no 'Capital Gains' section. Taxable gains are declared under 'Other Income' in the Income Tax Return.
Study the concept behind this question: Stamp Duties Explained: BSD, ABSD & SSD (Singapore, 2026)
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