I'm thinking with interest rates on deposits so low and likely to remain so for a couple of years before the inevitable slow rise would it not be a good idea to purchase a property before 311214 instead of leaving cash on deposit. I imagine if I invested say 150k cash in a second property I am thinking with say just a 5% increase over 7 years would leave me far better off in 7 years time if I wanted to sell the property - i.e hold for 7 years and pay no cgt on disposal. I am aware of property taxes involved. Anyone agree or disagree with me as i believe there is a smell of things picking up. I would be purchasing in a vibrant rural town. At worst if I rented the property and it never went up in value in the 7 years it's probably still a safer bet than cash on deposit return wise. Thoughts appreciated.
Property investment pre 311214 CGT deadline
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mandelbrot
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The thing is that your capital is fully at risk, in the event that there's another (presently unenvisaged) property crash... as long as you're aware of and willing to accept the downside risk then you can decide whether the potential return justifies the risk.
dereko1969
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Do these exist? I'm not doing down rural towns but by vibrant I'm taking you to mean one where people have a good standard of living, have a very high level of employment and there are no ghost estates there and everything about it is tickety-boo?
Is it Tir-na-Nóg?
OK 'vibrant' may have been a bit over the top but 'Tir na nog' it's certainly not.
Look there is a general feeling that things are picking up a bit - right. Interest rates on deposits are crap - right. The CGT incentive will disappear at 31st December - right. Property prices are not much above crash levels in the area posssibly 10% higher than lows so if we have another crash I really don't think they can sink an awful lot. Properties in the area that were up for sale for 2-3 years are now moving these past six months.
I thought this thread may have provoked more response actually but I suppose it's early days.
Look there is a general feeling that things are picking up a bit - right. Interest rates on deposits are crap - right. The CGT incentive will disappear at 31st December - right. Property prices are not much above crash levels in the area posssibly 10% higher than lows so if we have another crash I really don't think they can sink an awful lot. Properties in the area that were up for sale for 2-3 years are now moving these past six months.
I thought this thread may have provoked more response actually but I suppose it's early days.
T McGibney
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dereko1969
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Yes things are picking up but my reading is that it's very much two-speed, Dublin and the rest.
The only place I'd invest in property outside Dublin would be in a University town and only then if the property was dirt cheap and had a cheap agent looking after it.
The only place I'd invest in property outside Dublin would be in a University town and only then if the property was dirt cheap and had a cheap agent looking after it.
Agreed the property price pick up is two speed. Rampant in Dublin etc and at a crawls pace elsewhere. But my point is even it property prices over the 7 years were to go up other than Dublin 3% to 5% p.a one would be sitting pretty after 7 years on selling up with no cgt versus getting hammered with DIRT every year.
Shares fall and rise more often than property. Shares have had a good run and granted with ECB quantitative easing will help. Profits are taxable. property won't be subject to cgt. More restless nights guaranteed I would have thought on investing a sum of € 150k.
Thinking of this on 9/11.
Thinking of this on 9/11.
Daddy, I am shocked that there isn't a much greater positive response to this property incentive. I bought an investment property in Dublin for cash at the start of this year, without knowing anything about this incentive. The idea was to flip it, but when I found out about this property incentive it became a no brainer.....hold on it it for 7 years, sell it and save on 33% CGT. I have many rental properties and the rate at which rents are increasing, in the last year or so is staggering. I would of thought the best time to invest in anything is after a crash when most others are others scared to. As they say with risk comes reward!!!!
I bought an investment property over the summer in Cork City and I never knew about this CGT exemption until I read about it on here.
Estate agent never mentioned it at all. With property also creeping up in Galway and Cork cities, it would definitely be worth my while to hold onto it. A saving of 33% on CGT is definitely a no brainer and makes the investment very worthwhile.I wouldn't agree with this. Anything Noonan says you can take with a hefty grain of salt. Look at all he said about LPT being tax deductable.
My guess is that the CGT exemption will be extended, governments cannot but help themselves to interfere with the property market.
T McGibney
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In the context of property investment, "no brainer" is an oxymoron.
It's worth noting that the 7 year exemption is a qualified one, and full exemption is only possible if the property is sold on the 7th anniversary of its acquisition.
It's worth noting that the 7 year exemption is a qualified one, and full exemption is only possible if the property is sold on the 7th anniversary of its acquisition.
Time definitely running out - a far safer bet of some return rather than leaving in cash -
more thoughts welcome please.
Budget to scrap Cap Gains Tax exemption
Thursday, 9th October 2014 03.46pm
Minister of Finance Michael Noonan has confirmed that he does not intend to extend the Capital Gains Tax (CGT) exemption any further.
"I use tax breaks to get a particular economic or social response in the short term but I will not have it bedded in as a permanent feature of the tax code," he said.
Following the property crash, the Government, in Budget 2012, introduced a relief to incentivize the public to once again buy property with the promise that if that property was held for more than 7 years then on sale the seller would not be subject to Capital Gains Tax (CGT) on any uplift in value.
The relief initially applied to any property bought between 7 December 2011 and the end of 2013. However this was extended, in Budget 2014, until 31 December 2014.
Aidan Byrne, Taxation Partner, Baker Tilly Ryan Glennon commented "As we know, the property market has been on a steady upturn in the last year, people are seeing the value of this relief more and in practice are utilizing the relief. Those who have not bought property since the 7 December 2011, but have the means to do so, should consider availing of this relief especially in conjunction with succession planning and potential dwelling house relief".
By way of example of how the relief applies: if the property was bought in January 2012 and sold in January 2022, the property would have been held for 10 years, so 7/10 of any gain will be relieved from CGT and 3/10 is taxable.
more thoughts welcome please.
Budget to scrap Cap Gains Tax exemption
Thursday, 9th October 2014 03.46pm
Minister of Finance Michael Noonan has confirmed that he does not intend to extend the Capital Gains Tax (CGT) exemption any further.
"I use tax breaks to get a particular economic or social response in the short term but I will not have it bedded in as a permanent feature of the tax code," he said.
Following the property crash, the Government, in Budget 2012, introduced a relief to incentivize the public to once again buy property with the promise that if that property was held for more than 7 years then on sale the seller would not be subject to Capital Gains Tax (CGT) on any uplift in value.
The relief initially applied to any property bought between 7 December 2011 and the end of 2013. However this was extended, in Budget 2014, until 31 December 2014.
Aidan Byrne, Taxation Partner, Baker Tilly Ryan Glennon commented "As we know, the property market has been on a steady upturn in the last year, people are seeing the value of this relief more and in practice are utilizing the relief. Those who have not bought property since the 7 December 2011, but have the means to do so, should consider availing of this relief especially in conjunction with succession planning and potential dwelling house relief".
By way of example of how the relief applies: if the property was bought in January 2012 and sold in January 2022, the property would have been held for 10 years, so 7/10 of any gain will be relieved from CGT and 3/10 is taxable.