CGT on rental property.......help

[joxer]

Hi,

I am preparing my CGT return on a rental property we sold to our son in Aug this year. The tenant moved out in January so to help get him on the property ladder we decided to sell it at a reduced market value rate. I have a few questions.

1. Can I include the legal costs (9k) when we bought the property in 2001 (legal fees, stamp duty) in my indexation calculation?

2. Can I also include the full retrofit of the bathroom the same year (2001) in indexation calculation (cost us about 4k at the time)

3. Prior to selling it in Aug to our son we spent about €25k improving it this year after the tenant moved out (new windows, new heating system, new kitchen etc.) Can I write this off against my CGT liability as enhancement costs?



Background: House was bought in 2001 for 180,000
Sold it in Aug 2025 for 280,000
For mortgage reasons the house was valued at 360,000, current market rate

CAT:

I understand our son will have a CAT liability of 80k (360-280). I'm fine with that; it’s treated as a gift and is well below the threshold.

CGT:

I need to confirm that my chargeable gain is the difference between the current market rate (360k) and the purchase price (+ allowable expenses) 220k……….and NOT the difference between selling price (280k) and the purchase price (+ allowable expenses)220k.

The revenue website is very vague about this so could someone confirm that that is the case.



So, let’s say for calculation purposes the sale price + allowable expenses is 220k

My chargeable gain is 360-220 = 140 @33% = 46.66k

This seems excessive as my monetary gain after selling the property is 60k (280-220) yet I'm expected to pay CGT on a chargeable gain of 140k that I did not receive. To add to that my son has a CAT liability of 80k.
Are my assumptions correct?

I heard the CGT paid be offset against the CAT liability, is this true?

Appreciate any comments.

 

[ClubMan]

I heard the CGT paid be offset against the CAT liability, is this true?

Yes, but if your son is already exempt from CAT/Gift Tax in this case then this doesn't help you/him?

Credit for Capital Gains Tax (CGT)

This page explains the credit that is available if CGT and CAT are chargeable on the same property

www.revenue.ie

CGT and CAT may be chargeable on the same property and on the same event. When this occurs, you may be entitled to a credit for CGT paid by the disponer against your CAT liability.

 

[ClubMan]

I need to confirm that my chargeable gain is the difference between the current market rate (360k) and the purchase price (+ allowable expenses) 220k……….and NOT the difference between selling price (280k) and the purchase price (+ allowable expenses)220k.

Capital Gains Tax

Capital Gains Tax is charged on the capital gain or profit made on the disposal of an asset. Some assets are exempt from Capital Gains Tax. Find out if you are liable for Capital Gains Tax and how to pay it..

www.citizensinformation.ie

Market value

In some cases, you will need to use the market value to calculate CGT, for example, if a sale price or cost price does not apply.

You will need to use the market value, instead of the sale price, to calculate CGT if you dispose of the asset:

• As a gift
• At less than it was worth, to help the buyer
• After inheriting it

 

[ClubMan]

To add to that my son has a CAT liability of 80k.

Not if he still has at least €80K of his a CAT Group A exemption threshold of €400K left to use. Even if he has already used this up then the CAT/Gift Tax would only be c. 33% x €80K and not the full €80K.

 

[misemoi]

This seems excessive as my monetary gain after selling the property is 60k (280-220) yet I'm expected to pay CGT on a chargeable gain of 140k that I did not receive.

But you did in essence receive that 80k, you just gave it to your son as a gift.