capital gains liability

A

AlbieL

Guest
Hi,
I have been attempting to sell our home for the last six months or so. We have moved house and are considering renting the last house for a year or two.
As things stand, if we sold it now, there would be no capital gains as it was our family home for 4+ years.
If I rented the house out for 2 years and then sold it, would my liability be based on the increased value from original purchase price or from change in value from time it ceased being our prime residence?
Alternatively, if we decided to give it a few more months to try to sell, leaving the house vacant, at what point would capital gains become an issue?

Appreciate any feedback I can get on this.
Thanks.
 
You have twelve month to sell the house after vacating before CGT become an issue. The capital gains tax is based on the original price of the house and not the price when it is rented. I believe their is a formula for the amount of CGT though, that takes into account the time it was a Private residence and the time it was rented.
 
AlbieL said:
Hi,
I have been attempting to sell our home for the last six months or so. We have moved house and are considering renting the last house for a year or two.
Click to expand...
You should probably read these threads so:

Sell home or keep as an investment?
Interest only mortgage for investment property
Property Investment FAQ
Key posts
If I rented the house out for 2 years and then sold it, would my liability be based on the increased value from original purchase price or from change in value from time it ceased being our prime residence?
Click to expand...
Roughly - if it was your PPR for, say, 4.5 years and then rented out for 2 years before being sold then c. (2-1)/(4.5+2) = 1/6.5 = 15% of any total capital gain with respect to the original purchase price would be assessable for CGT. This is the case whether or not it is rented during the 2 years after you have vacated it as your PPR.
 
You must log in or register to reply here.
Back
Top