Property sale and CGT

S

Shadowofthewind

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I am considering an extension to my principal private residence. I have two options to achieve ⁶this...

1. As an accidental landlord with tenancy issues, I could sell the rental townhouse and use contribution of sale to extend my home and put something away for kids education and improve cash flow.
2. Perform an equity release on principal residence and increase my level of debt to fund the expansion. Maintain rental and home and get by maintaining both properties.

What would you advise or recommend without the financials on these?

In relation to non principal private residence, we lived there as our home for 7 years. Does this open up the possibility of a CGT exemption

Thanks.
Ger.
 
You get relief from CGT based on the number of years that the property was your PPR (Principal Private Residence) compared to the total period of ownership (more or less, anyway - the calculation is little bit more calculated than that)
 
Shadowofthewind said:
In relation to non principal private residence, we lived there as our home for 7 years. Does this open up the possibility of a CGT exemption
Click to expand...

The main question can't be answered without the numbers.

In very simple terms, if you make a gain of €100k and you owned it for 16 years

The gain would be reduced by (7 + 1)/16 or 50%.

So your taxable gain would be €50k before any annual exemptions or use of losses.

Brendan
 
Thanks for the responses so far. Just to put some figures on it lightly...

Rental Property value 400k
Rental Purchased for 210k
Mortgage remaining approx 125k

I'll could pay off mortgage in 10 years. I have to throw in consideration of what if the kids choose a university in Dublin later in life but it may not happen that way either....

In all of this while rental is lightly profitable (as I'm not ripping off my tenants at market rates) I'm asking why raise more money to extend when I have equity somewhere else. Leveraging further will lead to a tradeoff in terms of having ideal home now where kids can benefit before they up and leave but also having to potentially budget on spend to maintain both.

Thoughts,
Ger.
 
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