I have a question around the allowable expenses when calculating a capital gains tax gain/loss for an accidental landlord. I will give random numbers, but its more to assist with the initial calculation, before talking it through in detail with the accountant (who can be difficult at times!!)
Say house owned for 10 years, lived in for 18 months by landlord and rented for the remaining 8.5 years. Understand the PPR element is the time lived in and the last 12 months, so 2.5 years or 25% of the gain/loss. The remaining 75% of the gain/loss is taxable
House purchased for 300k December 2006 *Stamp exempt as FTB*
Stamp paid of 10k July 2008 *Paid Stamp when rented out as no longer a FTB*
Tenants vacated September 2016
Repairs to house caused by tenants - 5k [professional cleaning services, repair damaged walls etc]
Refurbishment to house to increase sale price - 10k [sanding & varnishing floors, new carpet, painting etc]
House Sold for 250k December 2016
Estate Agent fees 5k
BER Cert 250€
Solicitor Fees 2k
I am assuming the only thing above not allowable is the repairs caused by the tenant, which should be offset against the rental income for the year. The remainder should be included in the calculation
House cost 310k (cost + stamp)
cost of sale 17,250
proceeds 250k
Chargeable Loss is 77,250
70% of this is 54,075€ and this is the deemed chargeable loss for tax purposes
Is this a 'fair' calculation?
I am assuming the mandatory cost of sale (estate agent, BER Cert and Solicitor Fees) are deductible.
I am assuming the investment into the house to increase the sale price is also a reasonable allowable expense, especially since it was done immediately before the sale
I am also assuming that the Stamp Duty is a reasonable expense since it relates 100% to the fact the house was treated as an investment property and would not be due if the house was a PPR