CGT on sale of investment property

Hi,


I bought a second house in 2009 to live in and kept original house to rent.
Now thinking of selling rental house.
First house bought in 1993 for 54,000 punts, had about 20,000 euro remaining on mortgage, but re mortgaged to put towards second house, currently owe 195,000 on rented house.
(so any mortgage interest relief I get for rental is on the original remaining balance of mortgage i.e. 20,000)

My second house (the one I bought in 2009) is my PPR and has been since Dec 2009, but the first house was my PPR from 1993 to 2009 and rented from 2009 to now.

I am trying to figure out my tax implications if I sell my rented house, It should sell for about 300,000.

Questions:
Is the original purchase price indexed to give me a value today, eg 54,000 punts in 1993 is equivalent to 100,000 euro in todays money?

How much of the profit can be tax free based on my time this was my PPR?

Do fees (eg estate agent, sols, BER etc) come off profit before or after tax?

Is tax at 42% on profit?

Does this simple math seem right?:
Sale Price 300,000 - Indexed value 100,000 = 200,000 profit
200,000 profit – the time house was PPR (5/22) = approx. 54,000
Tax is payable on approx. 54,000 at 42%

Any thought/advise appreciated

K

Depending on when in 1993 it was purchased, the indexation is either 1.331 or 1.356

Incidental costs such as stamp duty, auctioneer's fees, legal fees and advertising costs make be taken into account provided that the costs directly relate to either the purchase or sale of the asset.

Incidental costs on acquisition will be added to the purchase price of the asset.
Incidental costs on disposal will be deducted from the proceeds received on the disposal to arrive at a net proceeds figure.

The net proceeds figure will then be multiplied by 5/22 to give you the chargeable gain.

Thanks for your input Nutso.
The picture is getting a bit clearer now.
Will 'chargeable gain' then be taxed at 42%

CGT rate is 33%

44brendan said:

CGT rate is 33%

Click to expand...

Thanks that makes a nice difference to bottom line

There is also an allowance, around 1250 per person, double if married.

Did you make any improvements to the house, of a capital nature. This expenditure can also be indexed. Have a look at CGT on the revenue website. You ought to hire an accountant to do the calculations or a solicitor who is experienced with CGT will do just as well.

Bronte,
Yes I have made improvements, no receipts though,
I think all your inputs has made my mind up.
I think I should sell, Its costing me money every month and a tax bill every year along with LPT, PRTB, house ins and the hassle of being a land lord.
I will walk away with a bit of money in my pocket.
I just need to push the 'For Sale' button.
Thanks for all your inputs.

Don't give up on the improvements. What did you do and when. For expenditure of this nature it's going to mean bank withdrawals as it will have been major expenditure. That's the first place to look to see what you spent.

And I hear you about giving up being a landlord. I'm just waiting for the next bubble.