CGT on Investment property-Advice PLEASE!

[Mairead]

Myself and my husband bought a house 4 years ago in Dublin and lived in it for one and a half years. We then had to move city and we bought a new house and rented out the first house. It has now been rented for 2 years. What is the situation with CGT? Will we always be liable to pay this no matter how long we have the house? If so what is the percentage that we would have to pay. The house is now probably worth €300,000, but we would still have a high mortagage on it, probabaly €220,000.

 

[ClubMan]

If you owned it for 4 years and lived in it as an owner occupier for 1.5 years then c. (4 - 1.5 - 1) / 4 = 1.5/4 = 37.5% of any resale gain (less CGT allowances and allowable expenses) will be assessable for CGT of 20%. Note that if you bought it as an owner occupier (as seems to be the case) and then rented it out within five years of purchase then you are also liable for a clawback of stamp duty (i.e. you are liable for whatever stamp duty an investor would have paid on the purchase at the time). The stamp duty clawback liability would have been triggered when the property was rented out so it may be overdue. You should get professional advice on these matters.