Capital Gains tax if sell house at a loss?

C

curlysue82

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selling a house for 290,000 and it cost 320,000 to build?
my parents are selling a house to me for 290,000 , does anybody know if they will have still pay if its sold at a loss?

MAny THanks in advance for any advice
 
For CGT purposes it's irrelevant what price they sell it to you at - all that matters is the market value.
 
Thank Mandelbrot, what if they had a mortgage out to build for 320,000 and selling at a loss ? we're looking for a mortgage for 290.000 to take it off them as they are at a loss would they still have to pay the high tax on the sale?
 
I don't know what you mean by "the high tax on the sale" and I'm not sure what else to tell you, but I'll try walking you through it:

Step 1: Forget the figure 290k - it is irrelevant.
Step 2: How much is the house & site worth - i.e. get a proper valuation.
Step 3: Compare this to the cost (NB not the mortgage - the cost of the site & construction) - if market value is less than cost it's a loss situation.

There's no tax on a loss, I mean how would that even work?!
 
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