Help- Selling investment property but its down as our home on mortgage??

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Hi, We were living in our home (Dublin) for 5 years and decided to purchase a house in the country. We took out the mortgage on the new house and it went down as our investment property, we then rented out our first home (Dublin) one and half year ago and went to live in the "investment property" full time.
We are now looking to sell our first home (Dublin) and live in our "Investment property" for good, but dont know how to go about it, first of all due to renting the first house(Dublin) out how do we go about paying tax on it and then how do we change our investment property to now been our actually home. What do we pay Capital gains tax on??

When we rented our first home(Dublin) out it was worth the same amount as it is now where as our "investment property" has gone up in value due to renovations.

Any help from you would be brillant, iv no clue on tax issues what so ever..

Thanks again.

 

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you only pay CGT on the time the property was being let out and was not your Principal private Residence (PPR). You do not pay CGT on any of the period while you lived in the home as your PPR.

If what you say is correct (ie, that the let house is worth the same now as when first let) then there is no capital gain on that property since being let so no tax can be due on it.

You should write to revenue and ask them what proof they require that there has been no overall capital appreciation. Get their answer in writing.

I presume you paid income tax on your rental income and if not, you should make a declaration and tax return for that.

The house down the country has always been a PPR, correct? You may have an investment mortgage on it but it is actually your PPR and has always been for tax purposes. Revenue don't care if you paid a premium mortgage rate. Therefore there is no tax on any capital gain on it (in any case, CGT is a disposal tax-you'd have to sell the property to be liable for CGT in the first place).

The only issue I see is that you have probably been in receipt of Tax relief at Source on your Dublin property for the last 18 months. You would not have been entitled to that but you would be entitled to offset INTEREST paid on the mortgage against rental income. You should clarify the tax position with revenue in writing. You may actually be entitled to a refund as the mortgage interest paid may well be in excess of the TRS on the Dublin property.

Your bank are another story. They should have been informed that the Dublin property was no longer your PPR etc. but I think you should just now tell them that it's no longer your PPR from now on and try to get the lowest rate investment mortgage from them if they force you off the homeowner rate.

You got yourself into a bit of a mess by not doing things properly as now you are paying investment rates on your PPR! Depending on what product you have, it may not be possible in the current climate to get a lower rate owner occupier mortgage without incurring at least some expense (legal fees for remortgage).

If I'm assuming anything incorrectky please clarify. Others here are more knowlwdgable than me and no matter what advice you receive you should make written enquiries to revenue at the bare minimum after that. You don't want a bill + interest + penalties arriving in from revenue in a few years.