Taxation on the sale of property

[serotoninsid]

Difficult to say if this is in the right section - so mods, please move as you feel appropriate.


I have a PPR at the moment and rent rooms out in this property (and have done since I bought it). I spend ten hours driving to work each week and a 80 mile roundtrip each day.

Therefore, I'm looking at buying a second property close to work - which will also have some form of rental element involved also.


Question: If at some stage, I decide to sell one of these, provided, its my PPR, I pay no CGT on it - is that correct?

If I was to sell the second one a year later, would CGT apply? The essence of my question is - there must be some element of a timeline involved with regard to the application (or non-application) of CGT??

 

[Brendan Burgess]

If you are using the Rent a Room scheme, then the current house is your PPR.

If you sell it within one year of moving out, any gain will be exempt from CGT.

If you sell it after owning it for 10 years, but it was your PPR for 5 years, half of the gain will be subject to CGT. This applies even if the property gained while it was your PPR but fell in value as an investment.

You can only have one PPR. If you live most of the time in the other one, it will be your PPR.

Brendan