Capital Gains Tax

L

louis14

Guest
Could anyone please tell me what CGT I will be liable for if I sell the house that I am just about finished building ? Would I be liable If I lived in it for a while and rented out my original house ? Total profit may be around 150,000 euro
 
I presume that you will be liable for 20% CGT on any gain less allowable expenses and reliefs. I don't think that moving into it for a while just to benefit from owner occupier exemptions and then presumably moving back into your original PPR would cut it with Revenue but I could be wrong. You should get independent, professional tax advice on this if you want to do some legitimate tax planning.
 
Assuming the following sunario
Land 100,000
Cost of building house 150,000
Legal Expenses 3,000
Sale of house 403,000
then the profit is 150,000

CGT is then calculated as follows
Profit (Capital Gain) 150,000
Allowance 1,270
Liable to tax 148,730
Tax @ 20% 29,746

Assuming your original house is your PPR and is owned by you over 5 years you could rent it out and move into your new built house. This then becomes your PPR.

If your current home is owned by you for less than 5 years and was bought as a first time buyer i.e no stamp duty or reduced stamp duty you will be caught for stamp duty clawback and will have to pay the revenue the stamp duty applicable to the investors rate.

You will have to make tax returns for the rental income less allowable expenses to revenue every year
 
How can i avoid CGT? If I move into the new house , am i liable for Cgt on the sale of the old house? profit , maybe 100,000??
 
louis14 said:
How can i avoid CGT? If I move into the new house , am i liable for Cgt on the sale of the old house? profit , maybe 100,000??
Click to expand...
If you rent out the former PPR/first house then some portion of any eventual resale gain will be assessable for CGT based on how long it was rented out versus how long it was a PPR. For example: owned for 10 years, PPR for 6 years, rented out for 4 means that (10 - (6 + 1)) / 10 = 3/10 = 30% of any eventual resale gain will be assessable for CGT. f you rent it out within five years of the original purchase then a clawback of stamp duty will also apply.
 
You must log in or register to reply here.
Back
Top