Meaning of Capital Gain, Formula and How to Calculate

Meaning of Capital Gain, Formula and How to Calculate

formula and how to calculate capital gains
(Source: Freepik)

For investors, they should be familiar with the term capital gain, ie the profit that is obtained when someone sells their investment assets. In the business of buying and selling real estate, this term is also often used as a reference point for whether the investment assets owned are really profitable. So, for those of you who want to become real estate investors, here is an explanation of what that means capital gainthe formula and how to calculate.

Arts Capital gains In the property business

In the property business, capital gain is the profit that someone receives from selling the property, where the selling price is higher than when the person bought it. Smart real estate investors usually do not immediately sell the real estate assets they have purchased, but hold them for several years waiting for an increase in property prices to occur, after which they sell them immediately.

Also read: How to check and distinguish real or fake land/house certificates

Factors that can increase the value Capital gains Property


Location is one of the factors that can increase the value capital the gain of your property, the more strategic the asset of the property owns, the greater the increase capital gain what will be achieved. Just for the record, the property is located in a strategic location capital gain it can reach up to 20%-30% per year.

See also  How to Determine a Good Day to Move House, Do You Already Know?

See also: List of Cheapest Citra Indah City Housing


The more complete the facilities in the property asset, the more people are interested in buying. For example, there is a swimming pool, it has technology smart home system, water heater, has a garden and so on.

Big Name Developer

Believe it or not, the name of the developer can also affect the value capital gaingreat developers usually are track record which is good when building a property. This can certainly increase someone’s interest in buying a property.

See also: List of the most economical Azalea Residences

Calculation formulas Capital gains

For those of you who are real estate investors, here is the formula to calculate it capital gain: :

Sale price of property – Initial purchase price of property: Initial purchase price of property x 100

How to calculate Capital gains

If drawn from the formula to calculate capital gain first, really count capital gain quite easy. For example, if you buy a house for Rp. 700 million, after the following year it is sold for Rp. 1 billion, then the price of Rp. 1 billion is subtracted from Rp. 700 million, the result is Rp. 300 million, then divided by Rp 700 million, then the result is multiplied by 100, then capital gain it is 42% annually.

See also: 5 Cheapest and Fastest Home Remodeling Services