Capital Gains Tax on Second house.

N

nudger

Registered User
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First time poster, could do with a bit of help.

I bought my house in October 1992 for IR£52,000 and lived there until November 2004 as my PPR, moving back to the family home which I inherited.

The house is now for sale and I have been offered €270,000.

I can't get my head around working out the CGT, so any help would be great.

Between 2004 and now the house was not rented, family members and friends stayed from time to time but I guess I can't prove that and the other house was where I lived.

thanks
n
 
The house being rented or not has no bearing on the CGT so no need to prove that.
 
Sales Price less costs 269,000
Less Purchase price translated into €. x indexation 1.356 = €89,532
Gain €179,468
PPR exemption 156/245 (12 years plus last 12 months)
Gain €65,195
Annual Exemption 1270
€63924 x 33% = Approx €21k
 
Joe_90 said:
Sales Price less costs 269,000
Less Purchase price translated into €. x indexation 1.356 = €89,532
Gain €179,468
PPR exemption 156/245 (12 years plus last 12 months)
Gain €65,195
Annual Exemption 1270
€63924 x 33% = Approx €21k
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Hi Joe_90

Just to get things clear, you have the sales price less costs as -€1000 of sale price, how is that?

Can I not claim EA fees, Legal fees, about €6000?

thanks.
 
How could I possibly know that when you failed to state it in the post. €1,000 an estimate.
 
Thanks for coming back so quickly, and I appreciate your work on my tax estimate.

How the hell is the indexation worked out.

Cheers.
 
Had a look at that before, found it hard going.

On an older thread I seen someone post that the costs of buying the house (fees) could be taken off but others didn't think so.
 
Costs involved in purchasing house will be allowed. Did you extend the house and if so have you receipts.
 
Costs of acquisition are allowed for the base cost.

You probably don't need to understand indexation just make sure you have the correct dates and index. factor
 
If you are having difficulty understanding it all get proof of date of purchase, purchase price, Legal and stamp duty costs and any other costs associated with the purchase. Do the same with the selling costs including the estate agents bill and when you have this all put together call to some half decent accountant and get a price and this will be allowed against your tax bill as well. It will not cost a fortune if you have all your documentation collected and it will take the worry out of it for you
 
Thanks for the advice lads, I have a Solicitor who is used to dealing with property but wanted to have an idea my self.

Improvements were made but no receipts.

Are the stamp duty and legal costs also indexed or just Flat rate, think it was £2800 all in.
 
nudger said:
Improvements were made but no receipts.

Are the stamp duty and legal costs also indexed or just Flat rate, think it was £2800 all in.
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Improvements are also deductable and can be indexed. Have you a reasonable idea of how much these costs were - do a list of what you recall and keep that for future reference - revenue rules in any case state that receipts only need to be kept for 6 years so if you're reasonable about it you shouldn't have any problems (personally Ive kept every receipt since the year dot) I don't think stamp duty is allowed, that wouldn't make sense. Auctioneer and solicitor costs are allowed and can be indexed.

Indexation was I think originally to help take account of inflation but they did away with it from a certain point in time, but it still applies in your case. All you've to do is look at revenue.ie under CGT and there is a kind of table of example of how you calculate it and just put it into excel and you should be fine. But ideally you should get an accountant or your solicitor to do it.
 
nudger said:
Thanks for the advice lads, I have a Solicitor who is used to dealing with property but wanted to have an idea my self.
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Unless your solicitor has a specialist tax qualification or similarly specific tax expertise, be careful about relying upon them for CGT advice.

All solicitors are "used to dealing with property" but in my experience the majority don't have specific tax expertise, and if they get it wrong, you pay the price.
 
Yes it's a cost of acquistion, you're right. I haven't looked up CGT in quite a while. I was probably thinking that it's a tax and so couldn't be tax deductable. And while it's true that solicitors are not tax experts they are trained in certain taxes and a lot of them would be able to do CGT in particular with their eyes closed.
 
Thanks guys,

Put in new windows and doors in 2000 cost €6000 but don't have the receipt or company name (cash job) would this count as enhancement expenditure?
 
Believe it or not there used to be revenue/tax debates about whether replacing windows is repairs or enhancement (capital).

For our purposes I'd be going with enhancement. Are you not hiring a professional to do your CGT? If not, do it out yourself and go into revenue and find someone in there who knows CGT and ask them if you've made the correct calculation.
 
Bronte said:
I was probably thinking that it's a tax and so couldn't be tax deductable.
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The idea of a tax never being tax deductible has cropped up frequently in these pages in recent years, so much so that its now apparently being accepted as fact by some users. This is unfortunate as it is utterly untrue.
Bronte said:
And while it's true that solicitors are not tax experts they are trained in certain taxes and a lot of them would be able to do CGT in particular with their eyes closed.
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If you think that anyone can do a CGT computation with their eyes closed, then I'm afraid you have a very shallow appreciation of CGT and how it operates in the context of a property transaction.

Due to the amounts involved, even a minor error or omission can have profound financial consequences for the taxpayer. For example, failure to claim €20k indexed stamp duty would cost the taxpayer almost €7k in overpaid CGT and is irrecoverable after 4 years. And the consequences of a corresponding underpayment with subsequent penalties & interest are exponentially more serious.
 
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