- How Much Money Is Needed To Invest In Rental Property?
- Should A Real Estate Investor Get An Agent’s License?
- 5 Big Factors That Affect The Costs Of Renovating Your Home
- SIBOR Hike – What You Can Do With Your Current Loan
- 6 Basic Don’ts Of Real Estate Negotiation Tactics
- Will New Condo Relaunches Trigger The Great Property Sale We Have All Been Waiting For?
- 10 Proximity Amenities That Add Value To Real Estate
- How To Get Personal Loans More Easily With Good Credit
Unearned increment on property refers to an increase in land value over time that is not a direct result of actions taken by the owner.
Such value appreciation is often caused by the general improvement of conditions in the area, increase in general demand caused by growth in population, favorable master plans, etc.
If an individual or entity buys land 5 years ago at $1,000 per acre and sells it today at $3,000 per acre when no improvements have been made on it, the transaction would effectively let the seller realize an unearned increment value of $2,000 per acre.
Some people argue that land owners should be taxed for such gains.
But in real world practice, governments usually give tax breaks for long term capital gains. This encourages instead of discourages it.