CGT on property i hope to rent out

[hgf]

Can someone advise on CGT please?
I am considering a mortgage application and hope to buy a 2nd home and rent out my current home for 6 years. I am not in a position to sell this 1st home currently.
After the 6 years I planned selling my 1st property with the intention of paying off a lump sum of the new mortgage with this capital. Naively I hadn't considered CGT would be due on my 1st property if rented. Can anyone advise on a way of estimating this liability? When I hope to move I will have lived in 1st property for 14yrs and will rent it out for 6yrs.

Currently 1st property is valued at 300k. There is no mortgage on the property. Is there any way to reduce my CGT liability? Just to be clear not trying to slide responsibility here just hoping to make wise finance decisions in the early stages of the move with an informed idea of what is to come.

 

[Homelandfan]

see this key post by Brendan for estimating the CGT liability:

Key Post - CGT on a home which is rented out for a period

This has come up a few times and I was asked a question about it today, so I have extracted the relevant sections of the Revenue Guide CGT 1 and attached them to this post. Here is a simple example using the figures for 2014 House bought 1 January 2005 for €100,000 including stamp duty and...

www.askaboutmoney.com

 

[Protocol]

What did you pay for the house?

To estimate any possible CGT, you must first estimate the gain on sale.

 

[Gordon Gekko]

1/4 of any gain will be taxable basically based on 15 years of the 20 when the property was deemed to be your home (14 actual plus 1 deemed).

Costs will need to be taken into account (legals, stamp duty, enhancement, estate agent costs, etc). Costs are also affected by the above formula.

If this is happening now, you bought in 2005 so I can’t see there being a world of difference between what you paid and the current value.

Let’s say it increased in value by 20% over the next 6 years to €360k. Your taxable gain would be €15k, so CGT of only €4k odd when personal exemptions etc have been applied. The costs would have some effect also and I could be overly optimistic re your ‘05 purchase which might still be underwater.

I suspect that your CGT bill would be negligible or zero. Far more pertinent is whether this is a wise course of action at all. Values may not increase at all; they could fall. And what would you save on the new mortgage with €300k of extra equity to throw in now?