Building a house on corner plot

  • Thread starter Caroline4262
  • Start date
C

Caroline4262

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I have a corner detached house. I have space on the corner or at the side of my house to build another house. My questions are:-
1 If I build another house and move into it and then sell my PPR which I have lived in for 18 months would I be liable for CGT?
2 If I build another house and rent it out what tax would I be liable for?
3 If I build another house and then sell that house what tax am I liable for?
I see so many houses built on corner plots in housing estates I would like to capitalise on my corner plot if possible.
Thanks C
 
1 If I build another house and move into it and then sell my PPR which I have lived in for 18 months would I be liable for CGT?

>> From a revenue point of view all you are doing is moving from one PPR to another PPR so I don't see any tax liability.

2 If I build another house and rent it out what tax would I be liable for?

>> You're going to be taxed on the rental income, however, you can offset any mortgage interest so the key is the key as a big a mortgage as possible and don't use your own cash!

3 If I build another house and then sell that house what tax am I liable for?

>> You are liable for CGT on the profit of the sale.
 
Capital gains tax falls due on a property that is not your principal private residence when it is sold. If your mother builds a new house in the garden of her existing house, she will have to pay 20% CGT on the difference between the original value of the site and the building price and the subsequent sale price.
 
HI doberman
Another question for you. If I build a property on my corner plot and then sell my PPR and move into the new house, how long must I live there before I can sell it as my PPR? Is there a time that you must live in the new house before you are liable for CGT? Or can I sell it after living in it for 6 months or more?
Thanks again
C
 
Yes, you can do that caroline, and move along by selling 2nd house. I dont think there is a time limit on it, or if there is, its short. However, you cant keep doing this as the revenue can deem you to be using this a means of income and tax you at 42% on the gain!
 
Thanks for information. I will weigh up if the value of my house and corner plot outweighs building on it and selling PPR and then sell on new house after a while.
Cheers

runner said:
Yes, you can do that caroline, and move along by selling 2nd house. I dont think there is a time limit on it, or if there is, its short. However, you cant keep doing this as the revenue can deem you to be using this a means of income and tax you at 42% on the gain!
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