Sell or keep house

C

Confused!

Guest
Hi,

We bought a house 2 years ago which has increased in value of about €140,000. We are starting building this year on a family site and trying to decide whether to sell the house we have or rent it out. The advanages of selling are we pay no capital gains tax as its currently our primary residence. If we do this we will only end up with a mortgage of €110,000 on the house we build. If we don't we will have a mortgage of €250,000 on the house we build, and a mortgage of €190,000 on the other house. We would cover the mortgage by renting the other house alright. If we do keep it though we will have to pay 20% capital gains tax when we sell in a few years, plus we are paying the interest on a mortgage of €250,000 on the other house.

Any ideas please?
 
Hi,

I would recommend you to keep the first house if possible. We did similar. We bought a townhouse in 2002 for 158k. This house is now worth 270K. We rent it out and this covers the mortgage. In 2004, we built a house on a site that my parents gave us. Mortgage on this house was 195k - house is now valued at about 450k. We're now considering buying again to rent out. If we sell we will have to pay the CGT on the gain, but we're prepared to take the chance that house prices will continue to grow or even remain static.

Hope this helps.
 
Redser99 said:
We bought a townhouse in 2002 for 158k
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Did you pay the stamp duty clawback liability that arose when you switched from PPR to rental within five years of purchase as an owner occupier?
We rent it out and this covers the mortgage.
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After tax and expenses and vacancy periods are factored in?
If we sell we will have to pay the CGT on the gain
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Some of the gain.
 
personally my gut says sell. I don't see house prices going up much further and think a fall is quite possible. On the other if you live in a really strong rental area and you are in for the long term it could work.
 
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