CGT on selling apt

I have searched for various threads on this and i just wanted to confirm i had got it correct.

My husbands owns an apt which we are selling, we have bought a new house. A condition of the mortgage is that he clears his UB loan (ie mortgage).

Now the new house will be ready in about 4 weeks and apt not sold yet. We explained this and it will be fine so long as we clear the mortgage when the apt is sold.

If we sell it as quickly as possible and clear the mortgage, i assume we are not liable for CGT.

However we were thinking of of perhaps renting it out for a few years. If we do and sell it in say 5 years, then im assuming we are liable for CGT.

If so how is it calculated i saw somewhere it was 5/13ths of the increase in value from date rented to date sold?

Also would you advise that we change the mortgage on the apt to interest only until its sold. as we will be paying 2 mortgages in about a month, probably about €2,300.

Thanks.

CGT would be on 4/13ths of the TOTAL increase from when it was purchased, for the scenario you describe, assuming the apt is still his PPR and he sells it 5 years after it ceases to be his PPR.

Also, you will have no CGT liablity if you rent it for less than 12 months...May be a comprise worth considering.

Hardly worth renting it for less than 12 months given (1) hassle & cost of tax & PRTB registration (2) risk of a bad tenant trashing the place (3) any subsequent unforeseen delay in selling the property bringing it into the CGT net.

In a similar situation to first poster - looking for different advice though. Have put apartment on the market quite recently - and looks like it will take some time to sell, a little longer than I initially expected.

Buying a new property - which looks like it will complete in april/may and a condition of mortgage includes repayment of mortgage on apt, as well as another old loan with same bank (10,000), also have bridging finance from same institution.

Getting a bit concerned about timing and my ability to meet terms of mortgage offer, re loan/mortgage payouts etc. Do lending institutions (UB) facilitate this type of situation - i.e. I propose to clear the mortgage/other debts when property sells after new house is completed. Confused regaridng mechanics of this - anyone any advice?

We bought our first house 13 years ago. We bought a new house 18 months ago and rented out the first house.
We want to sell the first house. Is our CGT liability calculated on the diference between the current sale price and its original purchase price (as 13 years ago) or on its price (value) when we first rented it out (18 months ago)?

HollyCat said:

Is our CGT liability calculated on the diference between the current sale price and its original purchase price (as 13 years ago) or on its price (value) when we first rented it out (18 months ago)?

Click to expand...

The former. Don't forget that you can index the original purchase price for inflation up to 2003 (?), you can deduct allowable expenses, you get partial PPR relief in respect of the time that it was you home, you can offset previously incurrect capital losses (if applicable) and you can deduct your annual CGT allowances if otherwise unused.

Hi, just wondering where you got the figure 5/13ths... capital gains tax currently stands at 20% of the profit you made from the property.

Presumably the apartment would be owned for 13 years the first 8 of which were as a PPR and the remaining 5 of which were as a rental property? In this case (5-1)/13ths of any eventual capital gain would be assessable for CGT at 20%. Does that clarify?

Confused now..

I thought CGT was paid on the profit of
Sale Price - Mortgage amount still owed

If so, how does Original Purchase price come into the equation?

sorry but complete novice on tax stuff ;-)

Ignore last posting pls... I have it sussed now ;-)