The first 12 months after vacating your PPR is exempt from CGT. For example - if you owned a property for 10 years, lived in it as your PPR for 8 and then rented it for the remaining 2 then (2-1)/10 = 1/10th or 10% of any capital gain is assessable for CGT.
The Revenue website CGT summary guides cover this stuff. The actual divil is in the detail of the legislation (Tax Consolidation Acts). My calculations above are only illustrative, deal in round years for simplicity and could always be wrong. Anybody who needs to determine their actual liabilities should get professional advice.Clubman is there an official document/website that gives the formula you give above?? Thanks
Harsh or not that's how it works. The timing of gains is irrelevant. The amount of time that a property is rented out versus a PPR determines the proportion of any total gain assessable for CGT. If all paper capital gains are made while it was a PPR and none further while it was rented this is irrelevant and some portion of the total gain may be assessable for CGT by virtue of it being rented out. If CGT is a problem then there is an easy way to avoid it altogether - sell the PPR within 12 months of vacating it and take the full gain free of any tax.10% of any capital gain is assessable for CGT.
This seems very harsh, what if the capital gain was in the first 8 years when the propert was PPR, and for the two years when the property was rented the property decreased in value? I am not familiar with CGT, but I would have thought the CGT would only apply to gains for the two years the propert was rented!! Am I wrong, can anyone clarify??
Yes - the first 12 months are exempt from CGT even if rented out. But bear in mind if you rent it out within 5 years of purchase then a clawback of stamp duty is triggered.
No - if the clawback is triggered then what is owed is the amount of SD that an investor would have paid on the purchase of the property minus whatever SD the owner actually paid (which could be zero).
Yes - but how many properties realistically cost €127K or less in the last 5 years?
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