capital gains implication on buying and selling land/property?

I want to know whether one can buy a property and then sell another land property, and avoid capital gains on the sale of land, or whether the selling has to happen first before the purchase. Also, is land and part constructed property on a land treated the same for this purpose.

3 Replies to “capital gains implication on buying and selling land/property?”

  1. I noticed the Indian flag so maybe my answer is moot for your domestic tax laws but in the US there is a tax program called “1031 exchange” which allows you to sell a like-kind property and re-invest the proceeds, tax-free, into a similar property.

    The catch is the new property has to cost more than the old property. A good RE accountant may be able to get a land-sale to partially-constructed domicile covered under 1031. The usual 1031 is when you sell, for example, a two unit rental property and reinvest to a 3+ unit property.

    (btw, if you are in India, congrats on your World Cup Cricket victory!)

  2. Srinivas,
    If you sell the property after 3 years and want to purchase another property you can do so. But you will have to put the money in a separate a/c for one year . If in one year you buy the property there will no tax. For more details you shall consult a CA

  3. Only for reinvesting the sale proceeds within three years, you are exempted from long term capital gains. But if you purchase first and then sell your old property may not qualify for this exemption. Anyhow only Chartered Accountants can clarify this and hence contact CA.

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