# Invest in property no capital gains tax!!



## landlord (6 Apr 2014)

An article appeared in the Irish Independent today titled ....Be careful how you dodge the tax bullet on savings. 
Here is an extract from it........


* Invest in property. If you buy an investment property before the end of this year, you won't have to pay CGT on any profit you make on the sale of that property – as long as you hold on to it for seven years. You will usually have to pay tax on any rental income you receive however – but if you make a big tax-free profit after seven years, that profit could dwarf the tax you paid on rental income. Choose your property and location well however – if the market value of your property doesn't increase over time, you won't have any CGT to pay because you won't have made a profit. So you'll get no benefit from the CGT exemption.

I wasn't aware of any capital gains exemption if you hold onto an investment property for seven years??


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## Brendan Burgess (6 Apr 2014)

It was announced in Dec 2012 and extended in Dec 2013 

http://www.askaboutmoney.com/showthread.php?t=182727

http://www.askaboutmoney.com/showthread.php?t=182771


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## landlord (6 Apr 2014)

Brendan Burgess said:


> It was announced in Dec 2012 and extended in Dec 2013
> 
> http://www.askaboutmoney.com/showthread.php?t=182727
> 
> http://www.askaboutmoney.com/showthread.php?t=182771



Wow can't believe I missed that!!!
The first link you sent. It says I don't have permission to view it? Thanks


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## landlord (8 Apr 2014)

Brendan. I emailed twice Fingal county council department to confirm this. This is each response ....

Hi quick question.
I am in Swords, under PAYEE.
I purchased an investment property in Jan 2014 for the purpose of investment. If I sell it after 7 years will I be liable for Capital Gains Tax?
Thanks 

Dear .........

As the property is not your principal private residence you will be subject to CGT regardless of when the disposal is made.


Regards

Fingal PAYE Customer Services

AND

Dear.......
The duration of time for which you hold the asset is not a factor in determining your Capital Gains Tax Liability.

In general, if you sell a property for more than you purchased it for you will have a Capital Gains Tax Liability.
Please refer to the guide to CGT on the Revenue website @ www.revenue.ie for all relevant information.

Regards,
........
Fingal Income Tax


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## ronaldo (8 Apr 2014)

landlord said:


> Brendan. I emailed twice Fingal county council department to confirm this. This is each response ....
> 
> Hi quick question.
> I am in Swords, under PAYEE.
> ...




They are 100% incorrect. Provided you bought last year or this year and hold for 7 years, you have no liability to CGT.

If you hold for 8 years, you will be liable for 1/8th of the usual CGT applicable, and so on.


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## Joe_90 (8 Apr 2014)

Landlord

It appears that you don't believe Brendan?

As alluded to in other posts on AAM Revenue do on occasion get it wrong,  it may be semantics but something could be subject to CGT with a 100% relief.

The document you are looking for is
[broken link removed]


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## RainyDay (8 Apr 2014)

ronaldo said:


> They are 100% incorrect.


Possibly because he asked the County Council for an opinion on a taxation issue?


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## ronaldo (8 Apr 2014)

One thing I've often wondered about this but didn't look into it because I'm not yet in a position to buy is that, if the property purchased is free from CGT after 7 years, does that mean that, in the unlikely event that the property were to be sold for less than purchase price in 7 years time, the losses would be unavailable for use to write of against other gains?


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## Protocol (8 Apr 2014)

landlord said:


> Brendan. I emailed twice Fingal county council department to confirm this. This is each response ....
> 
> Hi quick question.
> I am in Swords, under PAYEE.
> ...




I suspect you contacted Fingal PAYE Revenue district, not Fingal County Council.


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## Dermot (8 Apr 2014)

I have not read the legislation but there is no way that I can imagine that there would be a specific rule for not allowing losses to be set against gains for properties bought during this period.

I would be pretty sure that if there are losses incurred on any properties purchased during this period that they can be put against other gains as normal


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## Lexicon (8 Apr 2014)

Dermot said:


> I would be pretty sure that if there are losses incurred on any properties purchased during this period that they can be put against other gains as normal



Why? If you sell your PPR at a loss its not an allowable loss. Exempt gain exempt loss no?

Dont make it sound less of a gamble than it is!


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## Dermot (8 Apr 2014)

The context we are talking about is properties other than PPR


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## Lexicon (8 Apr 2014)

Is it a coinsidence that ppr relief is s. 604 and this relief is s. 604A ? 

Anyone thinking about buying a house in Spain with this relief?


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## landlord (9 Apr 2014)

Joe_90 said:


> Landlord
> 
> It appears that you don't believe Brendan?
> 
> ...



Holding on to this property for 7 years, which was originally bought to flip, is such a big decision for me, I just needed to be sure. Thanks for the PDF link.


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## marathonic (9 Apr 2014)

Something I've considered and wondered would anyone have an answer:

If I bought development land and secured planning permission for 6 houses, started building them just before the planning ran out and then sold them in 7 years time, would all gains be free from CGT?


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## Joe_90 (9 Apr 2014)

Lexicon said:


> Is it a coinsidence that ppr relief is s. 604 and this relief is s. 604A ?
> 
> Anyone thinking about buying a house in Spain with this relief?



Just be aware it does not exempt the gain from foreign CGT.


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## Bronte (9 Apr 2014)

Lexicon said:


> Anyone thinking about buying a house in Spain with this relief?


 
We are talking about Irish property and Irish taxes. The Spanish would have first dibs at tax in the scenario you outlined. There could well be a Spanish equivelant of CGT on a sale.


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## Joe_90 (9 Apr 2014)

marathonic said:


> Something I've considered and wondered would anyone have an answer:
> 
> If I bought development land and secured planning permission for 6 houses, started building them just before the planning ran out and then sold them in 7 years time, would all gains be free from CGT?



Building houses is subject to income tax not CGT but if you held the land for 7 years, assuming you could buy any land subject to planning with the 80% windfall tax before 31 December, the gain would be exempt.

If you were to 'sell' the land as part of a construction contract it would be stock in trade, don't know if the exemption would apply in a case where the conversion of capital assets to stock in trade applies but you might be able to use a building company to ensure that S604A applies.


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## Nige (9 Apr 2014)

Dermot said:


> I have not read the legislation but there is no way that I can imagine that there would be a specific rule for not allowing losses to be set against gains for properties bought during this period.
> 
> I would be pretty sure that if there are losses incurred on any properties purchased during this period that they can be put against other gains as normal



section 546 restricts a loss in the same manner that a gain is restricted and so, a loss incurred on a property held for 7 years will not be allowable.

Obviously, the way to get around that, if a loss appeared to be on the cards, would be to sell the property before you held it for seven years.


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## ronaldo (9 Apr 2014)

Nige said:


> Obviously, the way to get around that, if a loss appeared to be on the cards, would be to sell the property before you held it for seven years.


 
That's a very good point


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## tonster01 (20 Aug 2014)

Hi all

Can any one tell me does the CGT exemption for property apply to companies who are buying residential properties for investment purposes also?

Many thanks in advance!

T


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## Nige (20 Aug 2014)

it does.


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