Confusion- what to do!!

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footsteps

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Ok story is, husband bought house 10 years ago (20 yr mtge), which we live in, we are currently in process of choosing a builder to build new house cost 200,000.

The current house is valued at 200,000 + , what are the tax implications if we sell - do we have to pay CGT, are you usually penalised if you want to pay off mortgage early?

Or should we keep house and continue to pay for it and rent it out when we move out?
Rental income would probably be about500 - 600 a month but house is not located in town but in country so could be some difficulty in renting also house is a bit old and could do with some fixing up!!
 
footsteps said:
Ok story is, husband bought house 10 years ago (20 yr mtge), which we live in, we are currently in process of choosing a builder to build new house cost 200,000.

The current house is valued at 200,000 + , what are the tax implications if we sell - do we have to pay CGT, are you usually penalised if you want to pay off mortgage early?

Or should we keep house and continue to pay for it and rent it out when we move out?
Rental income would probably be about500 - 600 a month but house is not located in town but in country so could be some difficulty in renting also house is a bit old and could do with some fixing up!!
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Hi there. If the house is your PPR (where you live) it is exempt from CGT when you sell it provided it is not sold for redevelopment. Even then you only pay CGT on the development value of it.
Fixed rate mortgaes incur a penalty if you pay them off early. Variable and tracker mortgages do not. There's small fee you pay but it's peanuts...just a procedural thing.
 
Thank you that clears it up a little just another quick Q from what you said, the house that we may sell has planning permission for an extension- would I be right in presuming that would not count as redevelopment?
 
footsteps said:
Thank you that clears it up a little just another quick Q from what you said, the house that we may sell has planning permission for an extension- would I be right in presuming that would not count as redevelopment?
Click to expand...

I don't know to be honest. The only example I've ever come across was a PPR sold with planning permission for apartments on the site. In this case the added value of this PP was subject to CGT.

In your case I'd say you're ok but you should take advice...not from a professional but from the Revenue as this is a black and white issue, it either is or it isn't if you follow me!
 
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