Recommend a tax advisor for CGT

D

Dave Byrne

Frequent Poster
Messages
57
I'm exploring the option of selling a site in consideration for a developer to build a house on a 2nd site in my back garden. This event would ordinarily trigger a CGT payable, but I understand a good tax advisor could structure the transaction to minimize or defer the CGT payable and defend such treatment should Revenue query it. Would anyone know of such an advisor? Thanks
 
Normally you don't pay tax when you sell your main home and up to one acre of garden but there catch with "development land". If your garden is worth more because it can be built on, you only get tax relief on what it's worth as a garden. The extra value because it's buildable gets taxed at 33%.

Eh OP if your garden as a garden is worth €50,000 but as building land it's worth €200,000, you'd pay 33% tax on the €150,000 difference.


Revenue will check that the value of the house you're getting matches what the land is actually worth. If the numbers don't add up, they'll investigate.

You need to get the land valued properly first - both as garden land and as building land. This will show you exactly how much tax you'll owe. I don't have a recommendation for an accountant but you'll need one OR a solicitor who handles property. They can check if any reliefs apply to your situation and make sure everything's done correctly.

Don't try to structure the deal artificially to avoid tax. The tax office has systems to spot this and you could face penalties if they think you're trying to dodge what you owe.


No 39 of 1997, Section 604, Revenue Note for Guidance

No 39 of 1997, Section 604, Revenue Note for Guidance
www.charteredaccountants.ie
 

Attachments

  • Screenshot_2026-02-07-08-08-24-838_com.android.chrome-edit.webp
    Screenshot_2026-02-07-08-08-24-838_com.android.chrome-edit.webp
    94.8 KB · Views: 58
Hi coffeepod, very much appreciate the response (and sorry I missed it), and well noted regarding getting this right. I must admit, I've struggled to make sense of my scenario to determine if the developers offer is a good one. Prima facie it sounds great, give up some garden and get a new house, but when I try to make sense of the CGT liability it's not so clear.

The site (which I would give up as consideration for the house) as is, as garden, is worth say 50k, or say 200k if a developer could put a house on it.
If I give it up I get a house which I would have otherwise paid, say 400k to build and it would be worth say 600k when finished.
So am I paying CGT on 150k (200k - 50k) or on the consideration of the new house, and is that consideration the build cost (400k - 50k) or the new house's market value (600k-50k)
These 3 treatments would attract CGT of 50k, 115.5k or 181.5k respectively?
 
Why would a builder purchase a site for 200, build for 400k, and have a property with 600k?

Your gain has nothing to do with what the developer does after the sale. It’s based on your gain. But you should ask an accountant exactly how you’d be taxed.
 
Last edited:
The builder is giving me no cash, he evidently feels he can build me a house more cheaply than what he would have to pay me to buy the site. The numbers above are illustrative to try to figure out how CGT is calculated to determine if this is a good deal for me.
 
Dave Byrne said:
The numbers above are illustrative to try to figure out how CGT is calculated to determine if this is a good deal for me.
Click to expand...
Of more concern to you would be whether the sale and build devalues your existing property.
 
it certainly would but I could live with that impact if I could realize a new house for myself at a discount to paying a builder for a one off new build.
 
Move into the new house when it's built, then sell your own one and you need pay no tax at all.
 
Dave Byrne said:
it certainly would but I could live with that impact if I could realize a new house for myself at a discount to paying a builder for a one off new build.
Click to expand...
As LLB said if that is what you want you’ve a “free” site worth 200k, build a house on it with direct labour cutting out the builder, and sell your current home to fund the build. That makes way more sense as you’ve the site already and then you’ve no CGT on anything.
 
if they moved into the new house, they would still be liable for the tax on the sale of the site, and then on the gift of the new house. All they would be exempt from is CGT on sale of a house, as they could sell old house as PPR and then new house is PPR, but that doesn't change the fact they sold a site, so what was its value, and got a free house in return, these are still liable to some level of tax.
 
As LLB said if that is what you want you’ve a “free” site worth 200k, build a house on it with direct labour cutting out the builder, and sell your current home to fund the build.
Click to expand...
I'd have no interest in going the direct labour route to build a house, even if I did, I don't want to sell the house I'm in. The attractiveness of the offer is I don't have to fund the build, it's the CGT that I can't avoid, or in this case, even calculate ?
 
I hasn’t realised you’re getting a built house. On your own site, and you’ve two sites, one you’re selling to the builder, who instead of paying you for the site is building you a house, and presumably building another house to sell.
 
Last edited:
You must log in or register to reply here.
Back
Top