Real Estate Investing Guide: The Difference Between Income Tax And Property Tax
Just like in any other business, real estate investing would require you to pay different kinds of taxes. Two of which are income tax and property tax. To know the twists and turns of real estate investing, you should know what these taxes are, when do you pay them and their difference.
As the name suggests, income tax is tax that is deducted from your income. It is charged on the financial income of people, corporations or further legal entities. There are different systems of this kind of tax coupled with different degrees of incidence. Charging this kind of tax can be proportional, progressive or regressive.
When tax is imposed on incomes of companies, then this may be called corporate tax, profit tax, or corporate income tax. Tax from the earnings of an individual is usually charged from his total income. But in the case of corporations, the tax is usually charged from the net income of the corporation.
In terms of real estate investing, income tax comes in when you are profiting or having income from your property. For example, you have invested in...