Capital Gains Tax on a self-built house

dub_nerd

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I live in a self-built house that I own, dating from 2004. There is a prospect that I will move house in the next while, but keep the existing house which will effectively become a holiday home and no longer my principal private residence. However, it will not be rented out or occupied by anyone else. I understand that I would be liable for Capital Gains Tax if the house is sold in future, with an exemption for the years I lived there. (Is this true even if I will be renting at my new location, i.e. I am not acquiring any other new house that I will own?).

My question is about how the house would be valued for Capital Gains Tax. I have no real way of reconstructing the original build costs. Does that matter? If CGT is only an issue going forward, can I just get the house valued as of when I stop living there? What proof, if any, would Revenue need that I did indeed live there up to now? (I am thinking that years from now this could also be very hard to reconstruct, unless I collect whatever evidence is needed now).
 
We were having a similar discussion recently, a number of issues arise.

The purchase of a site is the date of acquisition of the asset. The construction of a house is enhancement expenditure. The period while the site and house were occupied as your PPR will be exempt from CGT.
So if you bought a site in 2000 built a house and moved into it in 2005 then moved out in 2014 and sold it in 2020 you will get relief on 10/20 the gain over the 20 years.

As for the cost of the site and house, not sure why people have a problem with this, the solicitor will have a copy of the purchase contract.
You can get copies of cheques off your bank to prove the expenditure.
If you "built it yourself" as I hear all the time then you did not incur any expense so have no cost.
If all your contractor friends did you a favour then you did not incur any expense.
 
Thank you Joe_90, there's a couple of things there hadn't occurred to me at all. You are right -- the site was bought in 1998, construction started in 2003, ended in 2004, and have been living there since. "Self-build" is the usual euphemism -- it was all done by contractors. I shudder to think about reconstructing the expenditure. There will be a whole bunch of different contractors -- I would be doing well to even remember them all. I presume all the fixtures count as well as the construction -- floors, kitchen, bathrooms, outside finishing, tarmac etc. That said, I'm pretty good with record keeping: have all bank and credit card statements going back to well before then. Unfortunately don't have cheque stubs, so would need to get copies of all cheques over an 18 month period. I presume solicitor and architects fees are also allowable.

From a valuation point of view, is the entire period from site purchase to eventual sale treated as a block? Or does it matter that the whole thing was worth less from site purchase date to start of construction? I wouldn't have the faintest idea how to value the site as of the start of construction. Does the construction period itself (which was lengthy enough) count as "occupation"? Does the valuation on the date I moved out matter? Suppose the history looks like this:

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Is the calculation of the chargeable gain as simple as this: (z,000 - x,000 - y,000) x 11/24 ... where y,000 is the construction cost and 11 is the number of years not occupied as PPR out of 24.
 
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No the only values that matter are the actual costs, you can deduct the actual costs incurred from the sale proceeds to compute the gain.

The portion that is exempt is the time it was your PPR plus 12 months.
 
So just to check I understand -- the five years during which it was just a field will effectively be treated as if the house was standing on it, at full final value? (Does that imply I'd have to pay CGT on this period even if I sold the house today, having always occupied it since building).
 
So just to check I understand -- the five years during which it was just a field will effectively be treated as if the house was standing on it, at full final value? (Does that imply I'd have to pay CGT on this period even if I sold the house today, having always occupied it since building).

Correct, because you're selling a property (house and underlying land), and the relief is available for the period that you occupied the property as your PPR.
 
Think I understand all that. Many thanks for the help. So final question:

When one comes to sell, what evidence is required for Revenue about a) proof of occupation as PPR for a given period, b) enhancement costs?

Asking part b) because even if I can get cheque copies, I doubt I can produce an actual receipt for every single expenditure.
 
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