C.G.T. on investment property that was formerly a P.P.R.

[Brayman]

Hi There,
We are selling an investment property that was formerly our PPR. It was bought in 1997 and was our PPR until 2006. Since then its been a rental property. We expect to sell it for roughly the same value as when it ceased to be our PPR in 2006. Is that a relevant valuation for calculating the gain for CGT purposes?
Thanks!

 

[T McGibney]

Hi There,
We are selling an investment property that was formerly our PPR. It was bought in 1997 and was our PPR until 2006. Since then its been a rental property. We expect to sell it for roughly the same value as when it ceased to be our PPR in 2006. Is that a relevant valuation for calculating the gain for CGT purposes?
Thanks!

No.

The relevant valuation is the price you paid in 1997.

You are partly exempted from CGT on the basis of ((the number of years that you used it as your PPR)+1 year)/the number of years you owned it).

That's a tad simplistic but the gist of it.

 

[Brayman]

Thanks for the reply.....so very very roughly : House appreciated by €200k. House owned for 25 years. PPR for 10 (including the + 1) so amount owed = €200k *33%= €66k / 25 years and then multiplied by the 15 years it was an investment property = €39.6k less any applicable expenses?

 

[AAAContributor]

House appreciated by €200k

Does that appreciation amount include indexation relief?

As you acquired the asset before 2003, you should be able to increase your cost of acquisition by a factor which should reduce your chargeable gain:

Indexation Relief

This page is an explanation of indexation relief for Capital Gains Tax (CGT)

www.revenue.ie

 

[T McGibney]

Thanks for the reply.....so very very roughly : House appreciated by €200k. House owned for 25 years. PPR for 10 (including the + 1) so amount owed = €200k *33%= €66k / 25 years and then multiplied by the 15 years it was an investment property = €39.6k less any applicable expenses?

No, you deduct expenses from the gain, not from the tax bill. Get professional advice unless you know exactly what you're doing.

 

[Brayman]

No it doesnt include Indexation relief....and until you mentioned it I had never heard of it! Thank you both again for your help, I have enough information now to give to the accountant.

 

[ClubMan]

Previous threads...

CGT calculation for rental property.

Hi all, I am selling a rental property I have in the next few weeks. I lived in it for about 1.5 years in 2002 when I purchased it. Does anyone have an example of the CGT calculation, excel sheet that I can use to estimate the money I will have to pay? Thanks.

www.askaboutmoney.com

CGT on rental property sale

Hello, I purchase a property in 2008 for €250k. It has been rented since 2015 with form 11 tax returns completed annually. If we sell in 2018 for €250k it is my understanding that we are not liable for any CGT. I am confused by Form 11 pages 29 to 31. If we were to hold out and sell next year...

www.askaboutmoney.com

 

[Bronte]

No it doesnt include Indexation relief....and until you mentioned it I had never heard of it! Thank you both again for your help, I have enough information now to give to the accountant.

You need: Purchase price and date. Costs of purchase, solicitor, survey etc. Stamp duty I think. Sale price and date of contract. Dates you lived there. Cost of sale, auctioneer, solicitor, BER, survey etc. Very important is any major enhancement expenditure you incurred. Such as putting on a conservatory or doing an extension.