CGT on selling property

Hi,
Suppose you have a house. You live in it for five years, and rent it for two. Do you capital gains tax on the net gain or only 2 / 7 of the net gain or 1 / 7 of the net gain?
e.g. buy for 200K, Sell for 300K.
Adjusting for inflation the 200K is 235K. 5K selling expenses. Meaning 60K profit. So do you pay CGT on the 60K or 1 / 7 of the 60K or 2 / 7 of the 60K?
Thanks

breaks said:

Do you capital gains tax on the net gain or only 2 / 7 of the net gain or 1 / 7 of the net gain?

Click to expand...

The latter.

Firstly you are adjusting for inflation. This is dependant on when the house was bought. Adjusting for inflation in taxation terms is indexation and this finished on 31 Dec 2002. So if you have purchased the property after this date, no indexation applies and if you purchased it shortly before then, the indexation is minimal.

For example if you purchased your property in the tax year 2001, the indexation relief will only amount to 8.7% of the cost of the property so keep that in mind.

Also dont forget your annual personal exemption of €1,270 along with any other enhancement costs incurred during the period. Also your solicitors costs and other related costs around the time of purchase.