(a) Prop Ltd is a property developer. In the year ended 31 December 2014, Prop Ltd completed Project K which qualified as a development of ordinary standard residential property.
The following information relating to Project K has been extracted from Prop Ltd’s accounting records:
State the criteria for land appreciation tax (LAT) exemption for a property developer who sells ordinary standard residential property.
Ordinary standard residential property sold by a property developer will be exempt from land appreciation tax (LAT) if the land appreciation value is no more than 20% of the total deduction.
Calculate Prop Ltd’s LAT liability on Project K as at 31 December 2014.
Notes:
1. City maintenance and construction tax and education levy are to be calculated at 12% of business tax.
2. Ignore stamp duty.
LAT on Project K
