CGT on Property - 2015 Onwards

S

superd

Registered User
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18
Hi,

Im aware the 7 year rule RE CGT has expired end of 2014.

I am purchasing a property through a family friend over coming months, for approx 20% under market value. Other then this person being a close, the other main reason for the reduction is the house needs a lot of work, and being from a building background i intend to carry this out myself over the next 6 months or so.

My plan then is to rent the property out for approx a year until i available to move from my current dwelling, which i also own i.e. this will not be a first time buyer purchase.

So... say I buy this property for 300k this year, rent for the first 12 months. Then move in myself after 12 months, and eventually decide i want to sell 5 years down the road, and lets just say the house is valued at 500k. Can someone advise where exactly i stand with CGT, on the 200k gain?

Thanks guys :)

D
 
There is no CGT for a property during the period in which it is held as your principal private residence so all else being equal, in the scenario you set out there would be a gain for CGT purposes of 1/6 of the increase in value (given the property wasn't your PPR for the first year of 6). So this would be a gain for CGT purposes of €33.3k.

In terms of the market value of the property, surely the fact that the house needs a lot of work means that the market value is not 20% more than what is being paid?
 
ah ok... i understand now, percentage based, thanks for your reply :)

I am aiming to get the house 15-20% under market value considering works required.
 
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