2 houses-sell 1,tax query

i wonder if anyone can clarify the tax implications for the following situation:

my boyfriend bought a house in sep 05 as a ftb
he started renting it in oct 06
my boyfriend and myself are buying a house in march 07

if he wants to sell his house in oct 07,when the 1 year lease is up what tax will he have to pay on that sale.he will jointly own another house at that stage.

Thanks

Has he paid the stamp duty clawback? This was due from the first day he rented the place. Is he currently paying tax on his rental income? He will owe CGT at 20% of the total gain but only for the proportion of time after Oct 07 till he sells the place. If he sells before Oct 07 he won't have any CGT liability.

sorry not too up on tax,what is stamp duty clawback?as far as i know he hasnt paid it.
the rental income doesnt cover the mortgage repayment every month so we were tole there is no tax payable on the rental income,is that correct?

CarrieB said:

sorry not too up on tax,what is stamp duty clawback?as far as i know he hasnt paid it.
the rental income doesnt cover the mortgage repayment every month so we were tole there is no tax payable on the rental income,is that correct?

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Not necessarily. If it doesn't cover the INTEREST then he has a liability. He can offset all interest against rental income, assuming he's registered with the PRTB, has he registered?

Stamp duty clawback means that because he bought as a FTB he availed of a lower or zero rate of stamp duty, however once he rented the property within 5 years he becane classified as an investor and owes the investor rate of stamp duty on the original purchase price. Interest is accumulating on this he should exercise this liability asap

yes he is registered with the PRTB so does that mean ho doesnt have to pay interest on the rental income then?

yes he paid no stamp duty on the purchase.the house was purchased for €170k,how much will the investor rate of stamp duty be on €170k?

Stamp Duty is 3%

He is liable for income tax on net profits, i.e gross rent, less interest (interest element of mortgage repayments) less other expenses such as repairs, cost of insurance, etc.

who is the stamp duty payable to?who is the appropriate professional to deal with these tax issues?