Calculating CGT on rental property

C

colin44

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Am I correct in my calculations:

Bought property 2004 for 200k
Value now approx 250k
Was PPR for 12 years until 2016
If I was to sell now, gain = 50k
As was PPR for 12 years I would be exempt for CGT for these years?
out of the 50k 12 years PPR = 30k, and 8 yrs rented = 20k
So that leave 20k (8 yrs rented) for CGT @ 33% = 6.6k?

Is that right?
Thanks
 
No, you get relief for the last 12 months of ownership as well
Sale price
€ 250,000​
Cost
€ 200,000​
Gain
€ 50,000​
Years of ownership
20​
Years of PPR
12​
Extra year
1​
Relief as % (13/20)
65%​
Credit for PPR
€ 32,500​
Personal CGT credit
€ 1,270​
Taxable gain
€ 16,230​
Tax due
€ 5,356​
 
You could take account of 'ehancement expenditure' - once you did not claim it as deduction for rental income purposes. Also costs of acquisition could be included. Sales costs similarly. Was this simply a move or was it in any way connected with employment?
 
1. How much was cost of acquisition. Solicitor, stamp duty?

2. Did you improve the property?

3. How much is cost of sale. Auctioneer, solicitor.
 
@T McGibney Did you read the note yourself?

"Principal Private Residence (PPR) Relief​

A Principal Private Residence (PPR) is a house or apartment which you own and occupy as your only, or main, residence.
....
Note

The last 12 months of ownership of a PPR is considered to be included in your period of occupation.

This allows for the possibility that you have moved into your new home, but have not sold your previous home."


- The 12 months is for somebody selling their house who may have moved. Clearly in this case the person does not occupy the place as their PPR.

Happy to be corrected.
 
WizardDr said:
@T McGibney Did you read the note yourself?

"Principal Private Residence (PPR) Relief​

A Principal Private Residence (PPR) is a house or apartment which you own and occupy as your only, or main, residence.
....
Note

The last 12 months of ownership of a PPR is considered to be included in your period of occupation.

This allows for the possibility that you have moved into your new home, but have not sold your previous home."


- The 12 months is for somebody selling their house who may have moved. Clearly in this case the person does not occupy the place as their PPR.

Happy to be corrected.
Click to expand...
Read it? I've understood and applied the relevant provision more times than I care to remember over ~30 years.

Your apparent interpretation is that it only applies if you lived there throughout the last year. (Correct me if I'm wrong.) That makes no logical sense. If you've lived in the property during the last year of ownership, you don't need any concession, as this will already be counted as a period of occupation.
 
WizardDr said:
- The 12 months is for somebody selling their house who may have moved.
Click to expand...
It's not.

And the Revenue Tax & Duty Manual doesn't suggest so either:

Note

The last 12 months of ownership of a PPR is considered to be included in your period of occupation.

This allows for the possibility that you have moved into your new home, but have not sold your previous home.
Click to expand...
 
T McGibney said:
Read it? I've understood and applied the relevant provision more times than I care to remember over ~30 years.

Your apparent interpretation is that it only applies if you lived there throughout the last year. (Correct me if I'm wrong.) That makes no logical sense. If you've lived in the property during the last year of ownership, you don't need any concession, as this will already be counted as a period of occupation.
Click to expand...
Tommy, I feel for you, Kudos for your patience and coolness.
Enjoy the weather folks.
 
I’m about to pay cgt and haven’t heard this interpretation that you are making before, it seems absolutely clearly wrong. The 12 months applies in all cases if it was ever a PPR and is called out exactly for avoidance of doubt.

.

Partial relief​

(4)Where the dwelling house was not occupied by the individual as his/her only or main residence throughout the period of ownership, a proportion of the gain on the disposal is exempt. This proportion is the same proportion as the length of the period of owner-occupation (inclusive, in any event, of the last 12 months of ownership) bears to the length of the period of ownership. The balance of the gain is chargeable in the normal manner
 
And just for the OPs sake with the conflicting opinions, revenue themselves give a worked example showing the extra year applies to partial relief. The only area of debate is what the number is for Carla’s solicitor and estate agent with the tiny fees!

IMG_4677.jpeg
 
WizardDr said:
You could take account of 'ehancement expenditure' - once you did not claim it as deduction for rental income purposes. Also costs of acquisition could be included. Sales costs similarly. Was this simply a move or was it in any way connected with employment?
Click to expand...
Just a move..
All maintenance would be included in rental tax, but yeah costs of buying hse like solicitors fees etc could reduce it further
 
colin44 said:
All maintenance would be included in rental tax,
Click to expand...
On this point, enhancement expenditure really means substantial, tangible improvements to the property and always excludes maintenance, regardless of whether this has been claimed as a deduction against rental costs for income tax purposes.
 
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