I am at a dilemma!
I am moving to a new house, and I am not sure what is the best RE the existing apt I have..
RE tax there are some expenses I can claim - IT70
But RE capital gains I am not too sure how it works...
As far as I understand, If I dispose of the apartment within one year of it being my main residence, there will be no Capital Gains tax.
However, if I hold the property for more than 1 year, then the taxman looks at my total number of years of ownership and the total gain from the year I bought it.
My chargeable Capital Gain will be a fraction of this figure... and that fraction is the number of years I owned the property divided by the number of years that the property was my home.
example
If I sold the property in two years time...
I will have owned the property for 5 years
It was my home for 3 years
It was rented for 2 years
Question 1: then my chargeable taxable gain would be one fifth or two fifths of the total gain/profit?
Question 2: would the 1 year exemption after being my main residence, still applies if I rented the apt during that period?
I found this in the Revenue site, but is not too clear...
http://www.revenue.ie/leaflets/cgt1.pdf
I am moving to a new house, and I am not sure what is the best RE the existing apt I have..
RE tax there are some expenses I can claim - IT70
But RE capital gains I am not too sure how it works...
As far as I understand, If I dispose of the apartment within one year of it being my main residence, there will be no Capital Gains tax.
However, if I hold the property for more than 1 year, then the taxman looks at my total number of years of ownership and the total gain from the year I bought it.
My chargeable Capital Gain will be a fraction of this figure... and that fraction is the number of years I owned the property divided by the number of years that the property was my home.
example
If I sold the property in two years time...
I will have owned the property for 5 years
It was my home for 3 years
It was rented for 2 years
Question 1: then my chargeable taxable gain would be one fifth or two fifths of the total gain/profit?
Question 2: would the 1 year exemption after being my main residence, still applies if I rented the apt during that period?
I found this in the Revenue site, but is not too clear...
http://www.revenue.ie/leaflets/cgt1.pdf