Mixos wrote:... But surely most people selling property today will be taking a huge hit on the price they paid for it, therefore there will have been no gain, so no tax to pay?...
If you look at what you actually paid and what you would get today, I agree with you Mixos. Unfortunately it is not as simple as that. There are some pretty strict rules on how the original price is determined. If you don't fit into one of the categories they assign a nil value for the original purchase price.
Today the transfer of ownership contract must show the actual market price paid for the property. Provided your original transfer of ownership contract also shows the actual market price that you paid then your assertion is correct. Unfortunately, back in the day, that was not necessarily true and contracts often showed the objective value, which could be much less than the market price you paid. Capital gain would then be calculated based on the difference between the market value today and the objective value back then and that could be a significant amount.
Worse still many people, including me, bought a plot of land and then paid a developer/builder to build a house for them. The official transfer of ownership contract only shows the price of the land, again possibly the objective value not the market value. The cost of building the house was then a private contract between the owner and the developer/builder. As far as I can see that would not be taken into account by the tax authority. Thus the capital gain would be calculated as the difference between today's market price and the price of the land or possibly zero.
Another situation would be where somebody bought a run down property and then paid a builder to renovate it. Obviously the price in the transfer of ownership contract would be much lower than if the house had been fully renovated first. Filippos has stated before on this forum that he did exactly this and his contract with the builder was a handwritten estimate on a scrap of paper and a handshake. I'm not sure how you can submit that to the tax authority. Again there would be a large apparent gain.