PROPERTY SALE TAX EXERCISES

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Property Sale Tax Reminder

Property Sale Tax is a tax imposed on gains realized from the sale of immovable property.

Before calculating tax, it is important to determine:

Exercise 1 – Basic Property Sale

Mr. Jean purchased a residential house in Kigali in 2020.

Description Amount (FRW)
Purchase Price 40,000,000
Selling Price 65,000,000

Required

  1. Calculate Capital Gain.
  2. Identify the taxable gain.
  3. Explain the purpose of Property Sale Tax.
  4. State who is responsible for declaring the tax.
  5. Explain the declaration procedure.

Exercise 2 – Property Purchased Through Bank Loan

Ms. Alice purchased an apartment using a bank loan.

Description Amount (FRW)
Purchase Price 80,000,000
Bank Loan Interest Paid 6,000,000
Selling Price 120,000,000

Required

  1. Calculate the gain from the sale.
  2. Discuss whether bank interest should be considered.
  3. Determine the taxable amount.
  4. Explain how the sale should be declared.
  5. State documents required during declaration.

Exercise 3 – Multiple Property Sales

Holy K sold the following properties during the year:

Property Purchase Price Selling Price
House A 60,000,000 95,000,000
Commercial Shop 45,000,000 70,000,000
Warehouse 90,000,000 130,000,000

Required

  1. Calculate the gain for each property.
  2. Calculate Total Capital Gain.
  3. Determine the taxable gain.
  4. Explain taxpayer obligations.
  5. Discuss consequences of non-compliance.

RRA Interview Questions

  1. What is Property Sale Tax?
  2. What is Capital Gain?
  3. How is Capital Gain calculated?
  4. Who is liable to pay Property Sale Tax?
  5. What documents are needed when selling property?
  6. How does Property Sale Tax differ from Property Tax?
  7. What is the role of RRA in property transactions?
  8. What penalties may apply for late declaration?

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