The tax on capital gains will prevent speculation

The capital gains tax has always existed. A few years ago the percentage was 42%. Governments lowered that percentage to 10% and gave municipalities the power to change it.

Now with the new measure to the capital gain, the Government intends to charge a 75% tax on “extraordinary profits” related to that gain, whether the increase of the sales price is due to public or private investment.

According to Maria Duarte, Minister of Transport and Public Works, the objective is to avoid speculation. “What we are trying to do is that people can sell their lands at a fair price, that is what it cost them at a certain moment plus all the improvements that have been made,” she says.

This means that when people raise the price to turn the sale of that land inflationary, that money will go to the municipality. Thus realtors do not charge much, because most of the gains will be taken by the municipality and land prices will start lowering. With this law, 35% of the surplus goes to the municipality.

Source: http://expreso.ec/expreso/plantillas/nota.aspx?idart=8072245&idcat=38269&tipo=2

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