Selling Rental property-CGT on enhancements

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Boston Guinness

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Hi, I'm thinking of selling my rental property. I haven't increased the rent on the property in about 4 years as there are a couple of young teachers living in the house and I didn't really want to take advantage of them by over-charging. I'm charging €2,200/month for the 4 bed property but the rents for 3 bed houses in the area are now even higher than this at €2,300/month. I'm now subsidising the rent myself to the tune of an extra €1,000/month. I'm an accidental landlord but have the benefit of a tracker mortgage at 0.75%. I feel that now is the time to sell (especially with interest rates now in line to increase rapidly).

Have a quick question on whether we can claim for enhancements done to property. The house is a four bed semi-detached. We had an extension done to the back of the house (approximately 300 square feet) back in around 2008 for about €25k; we also had the attic converted in 2002 for about €15k.

We bought the house in 1997 for £125,000 and was our principal house up to 2008; the house has been rented out from 2008 onwards. House is worth approximately €640k and we owe €336k on it. Anyone have any idea based on the above scenario as to how much CGT we'll pay here. I am aware of indexation on houses bought before 2004 but it's confusing me a little as to how to work out how much I'm on the hook to pay Revenue in CGT.

Any help would be appreciated. Thanks!
 
Back of the envelope:

Indexation takes the base cost, including enhancement, to about €240,000.

Say another €10,000 for acquisition and disposal costs.

€640k - €250k is €390k.

You’ve owned it for 25 years, of which you lived in it for 11.

You get an extra year deemed occupancy.

So 13/25 x €390k is taxable at 33%.

So about €67k of tax.

As I said, back of the envelope, and it’ll move a little depending on when in the calendar year these various things happened. But that’s your ballpark.
 
You are charging € 2,200 / month but subsidising the rent yourself by € 1,000?
I don't understand what that means - How did you end up in this position? Do you have management fees exploding by more than 12K a year, or how do you end up with a costs base of 37K (ie 2,200 rent plus 1,000 subsidy x 12)?

Your interest rate of 0.75% on 336K means your monthly interest payment is like 220 Euro or thereabouts.
 
Gordon Gekko said:
Back of the envelope:

Indexation takes the base cost, including enhancement, to about €240,000.

Say another €10,000 for acquisition and disposal costs.

€640k - €250k is €390k.

You’ve owned it for 25 years, of which you lived in it for 11.

You get an extra year deemed occupancy.

So 13/25 x €390k is taxable at 33%.

So about €67k of tax.

As I said, back of the envelope, and it’ll move a little depending on when in the calendar year these various things happened. But that’s your ballpark.
Click to expand...
I would imagine the attic conversion and extension would also be deductible from year of construction once no capital Allowances were claimed against rental income. Apportioned correctly obviously
 
newirishman said:
You are charging € 2,200 / month but subsidising the rent yourself by € 1,000?
I don't understand what that means - How did you end up in this position? Do you have management fees exploding by more than 12K a year, or how do you end up with a costs base of 37K (ie 2,200 rent plus 1,000 subsidy x 12)?

Your interest rate of 0.75% on 336K means your monthly interest payment is like 220 Euro or thereabouts.
Click to expand...
I would imagine the OP meant additional capital repayments, looking at the post I would assume that took equity out of it in 2007/8 to buy another house .
 
Can I ask we bought a house in 2005 in Galway and it was sold as " builders finish " .
Things didn't work out career wise for my wife and her former employer asked her back , so in 2007 we came back to the east.

We had a considerable spend on getting the house ready to live in , we rented the house out from mid 2008 and it has been rented since.

My question is whether the capital costs , kitchen, bathrooms x4 wooden floors, tiling, really a host of expensive costs

If we were to sell that ,and we are really thinking of doing that would those costs be tax deductible from a CGT liability, obviously it was our PPR from 2005 to 2008 as we rented until Jan 2008 .

edit, the house cost €420k and a educated guess would be €80k stamp duty became an issue but I resolved that by appealing the charge the builder valued the site to high.

All other costs ,legal etc were covered by relocation expenses

Any advice would be appreciated.
 
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Paul O Mahoney said:
I would imagine the attic conversion and extension would also be deductible from year of construction once no capital Allowances were claimed against rental income. Apportioned correctly obviously
Click to expand...
You can't claim rental capital allowances for an attic conversion or construction of an extension.
 
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