CELEBRITIES ARE SELLING THEIR REAL ESTATE TO SAVE TAX AND REINVEST SMARTLY

For today's celebrities, many of whom have become High Networth Individuals (HNIs), real estate has become more than just a status symbol.

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It has become one of their strategic investment tools.

The economic liberalisation of the 1990s has opened up vast opportunities for Indian celebrities, ranging from films, brand endorsements, a growing number of multiplexes, rising international appeal, global tours, social media exposure to OTT platforms, adding tremendously to their income, according to analysts.

As their earnings soared over the past few decades, many of them entered the league of HNIs and Ultra High Net-Worth Individuals (UHNIs) with a growing interest in wealth-building through diversified income streams beyond just acting and investments in assets, including real estate, they added.

For example, celebrities such as Shah Rukh Khan entered the Hurun India Rich List 2024 and joined other names such as Juhi Chawla, Hrithik Roshan, Amitabh Bachchan (right) and Karan Johar.

Thus, the portfolios of the celebrities today include everything from luxury residences and holiday homes to commercial offices and land, driven by a mix of personal lifestyle choices as well as long-term financial planning. Today, they are seen actively buying, selling, renting or leasing out these properties.

Recent trends show that many celebrities are selling their luxury apartments in Mumbai and elsewhere, making people curious about their moves. What are the key reasons for selling?

While there is no single reason behind these decisions, tax implications and planning seems to be the prime reason behind investment in real estate. In the Union Budget 2024, the government introduced a flat 12.5% tax on long-term capital gains (LTCG) from property sales, but without the benefit of indexation. This means there's no inflation adjustment on the purchase price, so properties bought years ago could now attract significantly higher taxable gains.