Penalties on owning a second house?

[steadstill]

Hi,

I'm moving house, and not relying on selling my current house to purchase my new home.

In other words, I've recently purchased my future home, and now trying to sell my old/current home.

The old/current house has been on the market for a couple of months with little or no interest.

I think even with dropping the price, it will still take a long time to sell.

As far as I know, if I sell the house within one year of purchasing my new home, I will have no tax pentaties because both houses are Principle Places of Residence for me.

My question is, as an example scenario: if I sell the house for the same price I purchased it for, but it takes three years to sell the house, what kind of tax penalties should I expect?

Thanks

 

[azerogo]

As it was your PPR at all times, and has never been rented it out, there should be no tax penalties no longer when you sell it, as long as it remains empty for the complete period you are trying to sell it.

There is also no CGT on PPR if it sells above the price you paid for it.

 

[relax carry on]

Hi,

I'm moving house, and not relying on selling my current house to purchase my new home.

In other words, I've recently purchased my future home, and now trying to sell my old/current home.

The old/current house has been on the market for a couple of months with little or no interest.

I think even with dropping the price, it will still take a long time to sell.

As far as I know, if I sell the house within one year of purchasing my new home, I will have no tax pentaties because both houses are Principle Places of Residence for me.

My question is, as an example scenario: if I sell the house for the same price I purchased it for, but it takes three years to sell the house, what kind of tax penalties should I expect?

Thanks

There are no tax penalties at all. Tax geared penalties apply when you've done something wrong. If you sell your ppr and made and absolute fortune on it there's no Capital Gains Tax to pay as so long as you are eligible for PPR relief there's no tax to pay. If you sell a former PPR and make a gain and some element of the gain isn't covered by the PPR relief then only that portion is taxable. Your liability would be 33% of that bit of the gain outside of the PPR relief once associated costs etc are taken into account.

 

[steadstill]

OK, that makes sense, the very worst case scenario is I will get changed 33% on any profit.

I will probably make a loss, so they should give me a 33% rebate on the losses incurred

Thanks

 

[relax carry on]

OK, that makes sense, the very worst case scenario is I will get changed 33% on any profit.

I will probably make a loss, so they should give me a 33% rebate on the losses incurred

Thanks

Wouldn't that be nice. However if you do have a loss that's on the element not covered by the PPR relief then you can keep that allowable loss to put against future gains.