CGT on sale of property

[moodymichael]

Brief back story. Purchased a property about 17/18 years ago at the peak of the boom and ended up as an accidental landlord when we had to move to a bigger property.
Luckily it rented for the last number of years and will be selling it soon as it is now out of negative equity.
My question is, if it sells for more than we paid for it and use the difference to pay into the current mortgage, am I still liable to CGT?
Thank you

 

[ClubMan]

The mortgage is irrelevant to the CGT calculations.
This summary guide outlines how to calculate CGT liabilities.
The "Further Guidance" links at the end contain more detailed information.
If in doubt get professional tax advice.

How to calculate CGT

This page explains how Capital Gains Tax is calculated

www.revenue.ie

If you post the relevant details/figures here then others may be able to give feedback on the possible calculations.

 

[peemac]

My question is, if it sells for more than we paid for it and use the difference to pay into the current mortgage, am I still liable to CGT?

as above, the mortgage has nothing to do with it.

For arguments sake (and ease of calculation) you bought for €500k in 2005 and selling it for 600k in 2025.

"Gain" = €100k

Again for easy calculate example, you lived in it for 9 years and rented it for 11 years. Revenue allow a year extra as your main residence, so they treat it as lived for 10, rented 10.

The taxable gain is now €50k (half the ownership time), but this does not account for expenses

You have deductions - buying costs, selling costs (agent, legal fees & stamp duty) These are deducted from the overall gain €100k in the example)

Possibly work was done to get it ready for the sale. Also deductible.

Possibly 25k or more of deductions there, so net gain in this example is 75k. Tax is on 50% of that gain (using the example and 10 years rented + 10 years lived in) - 37.5k @ 33% = 12.5k

You also have €1270 cgt allowance - double if house in joint names, so up to €850 off that 12.5k example