Tax on profits from selling rental property?

J

John_Jo

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Hi Folks,

Not sure if this post is in the correct section but here goes?

I built an investment property five years ago. I now owe €100k on the property. I rent it out by the week during summer months and use it myself at other times. This property is in the countryside over 100 miles away from my place of work so would not be practicle for daily use by me.

Myself and my wife live in a small city property (owe 200k) and space is becoming an issue as we will be starting a family soon.

If I put the investment property on the market I would be confident of getting €300k for it.

My question is; how would this payment be treated by the bank and revenue? Obviously I would have to pay back the outstanding 100k on the mortgage, but the other 200k "profit", how is that taxed?

Any advise appreciated.

J.
 
You pay CGT on gains made between the cost of acquisition of the asset and the disposal value.

Mortgage is not relevant, acquisition cost is.
 
Tax on profits from selling rental property

Thanks Protocol,

"The cost of the acquisition", what exactly does that mean in my case? I built the investment property on family land so did not have to buy the site. Did invest about 10k in putting in a road and clearing the site before i ever took out a mortgage to build the property. Sorry, i'm a bit unclear on what is taxed. I also would have spent quite a bit casually over the years in furnishing the property (completely outside of mortgage money).

Any further advise would be appreciated.

Regards

J.
 
I am not an expert.

But all those costs you refer to must be combined to arrive at an acquisition cost.

Obviously it's easier if you simple buy an asset straight, e.g. shares or a new house.

As you built a house, it seems to be more complex.

You have a contractor's bill + site costs + engineers costs + fitting + development levies, ETC.

Usually somebody building a house would know how much it cost them to build.
 
Also, if the land was gifted to you, I'd say you still include the land cost???

But I'm not sure on that.

Specialist advice may be required.
 
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