Selling investment property, tax implications...

D

derek1970

Guest
I am about to sell an investment property and fortunately, should have +/-100,000 equity left over. However, our current home is in negative equity to tune of approx 80,000.

My question is, why should I have to pay 25% CGT on this profit instead of being allowed to use it all to reduce my mortgage & thereby eliminate the negative equity that could tie us to this place forever?
 
Because you live in a country that voted for consecutive thieving politicians and now needs all the tax income it can get to bail out banks and developers.
If you follow your argument to its logical conclusion, why pay tax at all on income or anything else? Ans: Because you have to.
 
There is only one way this would be in any way logical (although still not successful) and that's if you sold your PPR. No tax system allows you to offset an *unrealised* loss against a capital gain.

Gains made on PPRs are exempt from CGT and, therefore, losses on PPRs are not allowable. This has nothing to do with "thieving politicians" and I'd imagine there would have been national uproar if gains on PPRs had been taxed during the boom years.

OP, you will have €75k instead of €100k. So put that against the negative equity and you are still in good shape.
 
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