WHAT ABOUT Capital Gains Tax?
I was reading one of the posts describing tax on investment properties could somebody please be kind enough to explain this to me:
"You will pay 20% CGT on any profit you make when you sell the house. The profit is calculated as the net sales proceeds less the cost of acquisition. The cost of acquisition includes legal fees and stamp duty and any pre-letting refurbishment or decoration for which an income tax deduction was not claimed. The cost is indexed for inflation."
Does this mean that if someone bought a place and then ten years later went to sell it for lets say the gain was 100,000 and at the start there were costs of 10,000 and over this time lets say that there was 4% a year inflation, is the taxable income:
100,000-[(10,000 *1.04) + (10,400 *1.04) + tens times total.....] = ?
therefore
100,000-14,802 = 85,198
This seems to mean that a lot of your potentially taxable income is removed!!
That sounds almost too fair for Ireland!!
Cheers
David
I was reading one of the posts describing tax on investment properties could somebody please be kind enough to explain this to me:
"You will pay 20% CGT on any profit you make when you sell the house. The profit is calculated as the net sales proceeds less the cost of acquisition. The cost of acquisition includes legal fees and stamp duty and any pre-letting refurbishment or decoration for which an income tax deduction was not claimed. The cost is indexed for inflation."
Does this mean that if someone bought a place and then ten years later went to sell it for lets say the gain was 100,000 and at the start there were costs of 10,000 and over this time lets say that there was 4% a year inflation, is the taxable income:
100,000-[(10,000 *1.04) + (10,400 *1.04) + tens times total.....] = ?
therefore
100,000-14,802 = 85,198
This seems to mean that a lot of your potentially taxable income is removed!!
That sounds almost too fair for Ireland!!
Cheers
David
