Capital gains on house , land sale.

Hi everyone.

Suppose a person is considering selling some farm land and a dwelling house what is the story regarding capital gains tax. The farmland was given for love and affection by the persons parents about 20 years ago. For 10 years the land was farmed by the gent. This person is 46 and is in bad health and can no longer farm the land. He is now registered as disabled. Because of his bad health he let the farm for the past 9 years, he kept some of it but now wonders if he could sell it as he cant walk around it anymore.

The dwelling house was belong to his parents , it became his family home, he lived there after the parents died for about 10 years. About 6 years ago he built a new house, ran into difficulties with the builders and eventually moved in. It was only recently he became confident with the new house, homebond called a few times because there were major cracks on two walls, he feared it would need to be repaired. Hence the delay in selling the old house. He accepts he would have made more money if he sold it earlier.

He still has some bits in the old home which he uses ie his washing machine and his clothes dryer and some bits in his new home. He cooks most meals in the new house, and his family sleep there. While the sale of some dwelling houses may be exempt for capital gains , would this apply here or if it does not how will the gain (loss) be calcualted. He tells me he did build on an extension and installed a new kitchen in the family home.

He did pay the €200 for one of the houses, and hopes to minimise his capatial gains liablity as much as possible.

He would like to sell it next year, so he can adapt the new house for his needs as a disabled person. The address he uses is the new house.

Any views/advice ?

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Not an expert here but his is my understanding...

In the case of the house, it looks like the new house became his principal private residence approx 6 years back so capital gains would be calculated based on its value approx 20 years ago when he inherited it and its value approx 6 years back when it was no longer his PPR as he moved to new house

In the case of the land, capital gains would be based on full 20 years since he inherited it

Do you know if he paid any inheritance tax or other when land house was signed to him as this would impact the calculations... more he paid then the less he would be liable for now.

I'm not sure if being disabled will reduce the liability or not but should be checked out.

Suggest that he maybe speaks to a solicitor for advise... Sorry I cannot help further Best of luck

Hi,
A farmer usually qualifies for retirement relief on the sell on the land. But there are criteria for this.
The land not leased in the last 10yrs
The age of the farmer, must be over 55yrs if i remember correctly
There is a limit of tax threshold. i think 750k if i remember

So this means that you dont qualify for this. So you will have to pay capital gains on the land and house, it the house isnt your ppr. A person can only have one ppr.
The market value at the time of last transfer of land & house.ie.20yrs ago is taken as the base. This amt is adjusted for inflation, revenue/accountant will have this data. Then all costs incurred in extension,legal fees etc are added to the base cost.

example:
Market value of land & house 20yrs ago

example:
market value 20yrs ago 100k
costs ie.legal 5k
105k x 1.72 inflation = 180k

extension 10yrs old 20k x 1.23 inflation = 24.6k

cost of sale.legal,auctioneer 10k

total cost 214.6k - sale prices 300k = 85.4k

85.4k x 20% = 17.08k - cg allowance = tax due

note: these are all estimate and its been a time since i have calculated cgt so tax rates etc. are likely to be incorrect, but you get the idea


Many farmers transferred land to a child ( tax free ) and using the childs name, sold it the 3rd party at no tax because the base cost is at the market value at the date of transfer from father to child which should equal sale price.