What is the general profit rate of real estate?

The profit rate of real estate is generally around 10%.

The net interest rate of the construction industry is about 10%, that is, when the annual project volume reaches 1 100 million yuan, the net profit is about10 million yuan. But the actual situation is not simple, because engineering projects usually require a lot of upfront capital investment. Take the 1 100 million project as an example, it generally needs to invest 30 million yuan. If this part of the funds is raised through bank loans, the interest expense may reach 3 million. Therefore, although the nominal profit rate is 10%, the actual capital cost borne by the enterprise is also quite high.

Profit model of real estate industry;

1. Land appreciation: the increase of land value is realized by purchasing, developing or improving land;

2. Housing sales: gain profits by building residential, commercial or industrial buildings and selling them;

3. property leasing: own and manage property, and obtain stable rental income by renting houses, shops or office space;

4. Property management services: provide maintenance, security, cleaning and other services for the property, and collect management fees;

5. Real estate financial services: providing financial products and services related to real estate, such as mortgage loans and financial leasing.

To sum up, although the nominal net interest rate of real estate and construction industry is about 10%, the actual profit rate will be greatly reduced due to the cost of capital because the project needs a lot of upfront investment and possible loan interest expenses.

Legal basis:

People's Republic of China (PRC) enterprise income tax law

Article 6

The income obtained by enterprises from various channels in monetary and non-monetary forms is the total income. Including: (1) income from sales of goods; (2) Income from providing labor services; (3) Income from property transfer; (four) dividends, bonuses and other equity investment income; (5) Interest income; (6) Rental income; (7) Royalty income; (8) Receiving donation income; (9) Other income.

Article 7

The following income from the total income is non-taxable income: (1) financial appropriation income; (2) Administrative fees and government funds collected according to law and incorporated into financial management; (3) Other non-taxable income as stipulated by the State Council.

Article 8

Reasonable expenses related to income actually incurred by an enterprise, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating taxable income.

Article 9

If the public welfare donation expenses incurred by the enterprise are within 12% of the total annual profit, they are allowed to be deducted when calculating the taxable income; The part exceeding the total annual profit 12% is allowed to be deducted when calculating the taxable income within three years after carry-over.

Article 10

When calculating taxable income, the following expenses shall not be deducted: (1) dividends, bonuses and other equity investment income paid to investors; (2) enterprise income tax; (3) tax late fees; (four) fines, fines and confiscation of property losses; (5) Donation expenditures other than those specified in Article 9 of this Law; (6) sponsorship expenditure; (7) Unapproved reserve expenditure; (eight) other expenses unrelated to income.

People's Republic of China (PRC) Commercial Bank Law

first

This Law is formulated in order to protect the legitimate rights and interests of commercial banks, depositors and other customers, standardize the behavior of commercial banks, improve the quality of credit assets, strengthen supervision and management, ensure the steady operation of commercial banks, maintain financial order and promote the development of socialist market economy.

second

The term "commercial bank" as mentioned in this Law refers to an enterprise legal person established in accordance with this Law and the Company Law of People's Republic of China (PRC) to absorb public deposits, issue loans and settle accounts.