# Capital gains tax due on rental/PPR property



## Unregistered (11 May 2005)

Question on capital gains tax which maybe someone can help me with
I an currently renting out a property for the last 3 years
Previous to this I lived in it for 2 years.
I am intending moving back into it while I am getting a house built
If I live in the apartment for 6 months am I still liable for capital gains
for the years I rented it out.
Apologies for the duplicate posts


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## ClubMan (11 May 2005)

Yes - you will still be liable for _CGT _on a portion of any resale gain. Based on the figures above I estimate that c. 2/6ths of any gain would be assessable for _CGT_. There is no way to avoid _CGT _liabilities by moving back in as an owner occupier once the property has been rented out. Note also that if you bought the property as an owner occupier and then rented it out within five years of purchase (as seems to be the case) then you are also liable for a clawback of stamp duty as explained on .


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## stuart (11 May 2005)

Why did you move out?

Was it work related?

stuart@buyingtolet.ie


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## WizardDr (12 May 2005)

Short answer:
You should move back and declare it as your PPR as the last twelve months would be a 'deemed occupation' even if for a day. But you must occupy.

Calculate the gain:

Divide the time into occupation and non occupation. First twelve months and last twelve months is deemed occupation (if you actually move back!)

Clubman has done that for you .. dont know if the last twelve months was allowed for, so its either 2/6 or even less.


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## stuart (12 May 2005)

If you moved out because of work there is a possibility that it could be deemed your PPR for the entire period of ownership, and no CGT whatsoever due

This has been overlooked above

If you post why you moved out, it would help to clairfy if you can qualify for this or not

stuart@buyingtolet.ie


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## ClubMan (12 May 2005)

stuart said:
			
		

> If you moved out because of work there is a possibility that it could be deemed your PPR for the entire period of ownership, and no CGT whatsoever due
> 
> This has been overlooked above
> 
> If you post why you moved out, it would help to clairfy if you can qualify for this or not



Yes - that's a possibility but there was nothing to suggest that this was the case in the original query. Best to clarify if this might be pertinent though.


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## stuart (12 May 2005)

I agree that there was nothing in the original post about why they have moved out or to suggest that it was for work reasons

When there was no reply, then someone else pointed out that there was CGT due

I just thought it was worth specifying why I asked my question

Tax planning is based on asking questions, knowing a lot of the seemingly unimportant information is what differentiates between good and bad tax planning


stuart@buyingtolet.ie


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## Unregistered (12 May 2005)

stuart said:
			
		

> If you moved out because of work there is a possibility that it could be deemed your PPR for the entire period of ownership, and no CGT whatsoever due
> 
> stuart@buyingtolet.ie



Could someone clarify this bit please?

My reason for asking is that I was unemployed for a few months and had a lot of trouble trying to get work, I moved to the UK and rented out my property in Ireland (7 or 8 years ago).
I will be liable for CGT as I intend to sell soon but I dont understand Stuarts quote.


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## ClubMan (12 May 2005)

See section 5 of [broken link removed]



> 5. Private Residence
> 
> ...
> 
> ...



I'm sure that somebody else (e.g. _Stuart_) can quote the relevant underlying _TCA_ legislation which is really the final arbiter in such matters.

P.S. _Stuart _- I didn't mean to sound like I was second guessing you above. More a case of thinking out loud!


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## Unregistered (12 May 2005)

Thanks for that post Clubman

I will look forward to any comments from Stuart

ps 
I wasnt the originator of this post, so sorry for piggybacking on your question. 
Regards
Sammy
(Samspudz)
-having trouble logging in as my computer is a bit stuffed!!


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## WizardDr (13 May 2005)

The original post did not hint that there was any particular reason for the 2nd property other than holding on (and renting out) the first. So I assumed that poster was close enough in distance to 2nd property. 

Stuart is stating that if the period of vacancy was caused by employement reasons, it may be included as 'deemed occupancy' and this might be available and Stuart gives the reference.


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## debtfree2015 (13 Feb 2013)

*Can anyone advise?*

Apologies for resurrecting this old thread (this doesn't count as 'bumping' does it?) but I wonder if anyone  could help.

I have a similar query to the original poster...and I wanted to verify my situation.

I bought a property in 2003 as a first-time owner-occupier.  I had barely moved in when I decided to go abroad and rent out the property.  I ended up working abroad until January 2006, when I returned home and resumed living in the property until I sold it (at a loss) in Dec 2011.

So I have three queries:

1. I have been worrying whether I could be followed up for stamp duty, but according to the link posted in this thread, because I worked abroad during my absence from the property I don't think I would actually be liable for the stamp duty after all.  Is that correct?

2. I am not sure if I received mortgage interest relief or not (as the bank were informed that I was going abroad)  but if I did, would I be liable to repay it back to Revenue?

3. I was wondering about rental income, but when I researched it some time ago, it seemed that I was resident abroad for long enough to either not be resident for tax purposes or something, or if I was, the rental income would be too low to go over the tax threshold.  I'm not sure what it was, but then I read recently that it is actually the responsibility of the tenant to pay the taxes to Revenue if their landlord is residing abroad... anyway, would I be correct in assuming that I needn't worry about the rental income now?

I just don't want Revenue to come looking for money at some stage in the future, especially when I feel like I am struggling as it is right now!


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## Bronte (13 Feb 2013)

I don't think any of what you posted sounds correct. 

Stamp duty

There was stamp duty clawback for those that purchased and rented within I think 5 years and then later reduced to 3 years (you've to double check on revenue.ie the rules for the different years(. And I don't believe that going abroad absolved you of this clawback.

Mortgage Interest relief

If you were getting this homeowner tax relief while renting that is incorrect and of course you'll have to pay it back.

Tax on rental income

If you think that your tenant is liable for your not paying your taxes, well I consider you mistaken. What makes you think you've to pay no tax in any case? I've just realised that you came back in 2006 so you could be very lucky on the rental income tax, as I think it was only from 2006 that you have to be registered with the PRTB. Presumably if your mortgage interest was high enough plus other costs you were running at a loss and won't owe any any rental income tax and presumable the clawback of the mortgage interest relief will be covered by this too. You'd need to put up figures for rent, outgoings and interest for those years to get better advice. This still doesn't solve the stamp duty - you'll have to wait until maybe one of the accountants on here can clarify this for you.


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## Eithneangela (5 Jul 2013)

*Capital Gains Tax*

This thread is the nearest one I could find to my query, so apologies if it's the wrong place.

I bought a house in Dublin 14 in 1982 for €42,500, and it was my family home (PPR) for 24 years. In 2006, I moved to the country and rented out the house in Dublin.
If I now sell the house, how would I calculate CGT in this scenario? I have researched the Revenue web site without any result.


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## Joe_90 (5 Jul 2013)

Have a look at this 
http://www.revenue.ie/en/tax/cgt/leaflets/cgt2.html#section11

You get the proceeds less costs of sale.

From that you take the indexed cost of the property €42500 x 2.52

That gives you the gain then the PPR exemption is computed as the number of months of occupation plus 12 over the total number of months of ownership.  That portion of the gain is exempt the balance is taxable.

Annual exemption per person €1,270.

Hope that helps


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## Eithneangela (5 Jul 2013)

Many thanks, Joe. That's really helpful and also very clear.


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## Eithneangela (6 Jul 2013)

Joe - you mention annual exemption of €1,270 per person. Is that a cumulative figure?


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## Joe_90 (6 Jul 2013)

€1,270 per person in the year of disposal.


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## Eithneangela (6 Jul 2013)

Again, thank you. I am sole owner. It was too much to hope for a little nugget like almost 30 years of the allowance.


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