CGT Allowable Expense in House sale.

I'm preparing a property for sale.

The full painting will cost up to €4k.

Would this be deemed 'enhancement expenditure' and therefore an allowable expense against CGT?

No at all answering your question, but I would question why in this market you would paint a house before sale? I doubt you would be adding 4k of value to the eventual sale price - in fact I would view a freshly painted house almost with suspicion...is the new paint hiding damp patches etc.

misemoi said:

No at all answering your question, but I would question why in this market you would paint a house before sale? I doubt you would be adding 4k of value to the eventual sale price - in fact I would view a freshly painted house almost with suspicion...is the new paint hiding damp patches etc.

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Interesting perspective.

But I'm reliably informed that I'll recoup more than the painting outlay.

And no, I'm hiding nothing!

charlie007 said:

I'm preparing a property for sale.

The full painting will cost up to €4k.

Would this be deemed 'enhancement expenditure' and therefore an allowable expense against CGT?

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No, unfortunately.

That is indeed what I've been told.

However below from Revenue seems to suggest a claim is plausible?

10.1 Allowable expenditure Allowable expenditure is divided into the following categories a) Cost of acquisition, i.e., the consideration which was given wholly and exclusively for the acquisition of the asset, plus the incidental costs of acquiring the asset; or, if the disposer created the asset (e.g., copyright or the goodwill of a business), the expenditure he or she incurred in creating it.(b) Additional expenditure, i.e., expenditure incurred to add to the value of the asset, in so far as the expenditure is reflected in the state or nature of the asset at time of disposal; and expenditure to establish or maintain legal title to the asset, or an interest in or right over it.(c) Incidental costs of disposal (restricted as in para 10.5).

Check the various Revenue manuals and guidance documents but, as far as I can see, painting and decorating might be an expense allowable against rental income but not against capital gains. They provide specific worked examples that state this to be the case but unfortunately I can't link directly to them. If in doubt get professional advice.

Edit: here's an example:

Thus, outlay such as expenditure incurred in decorating a house is not allowable because, if the house were used for the purposes of a trade, the expenditure would be allowable in computing the
profits of the trade.

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ClubMan said:

Check the various Revenue manuals and guidance documents but, as far as I can see, painting and decorating might be an expense allowable against rental income but not against capital gains. They provide specific worked examples that state this to be the case but unfortunately I can't link directly to them. If in doubt get professional advice.

Edit: here's an example:

Click to expand...

Thanks for that and I shall peruse carefully!