CGT/PPR - specific circumstances

R

Rebelman

Registered User
Messages
88
Hi,
I bought a house just over 2 years ago and it has been my PPR since then. I have been renting out 2 of the rooms, while keeping the rental income below the tax threshold. I am planning on moving from the area I am in and renting in a different place this summer - while keeping the house I have.
I have read alot of the threads on AAM about CGT/PPR etc but what I would like to know is if I decide to sell the house this Summer and not buy another place what are the tax implications (I will have the house for 2.5 years at that stage and did not have to pay stamp duty when I bought it - it was second hand house but below the 317k for FTB).

Many Thanks,

Rebelman.
 
Rebelman said:
if I decide to sell the house this Summer and not buy another place what are the tax implications
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As long as it was always your PPR and only rented within the limits of the rent a room scheme then there should be not tax (in particular CGT or SD clawback) implications. Just make sure that you are indeed within the limits of the rent a room scheme.
 
what I would like to know is if I decide to sell the house this Summer and not buy another place what are the tax implications
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As it is your PPR you will not have any liability to CGT. You will not have to pay any additional amount in relation to stamp duty.


When you purchase in future you will not be a first time buyer in relation to stamp duty so therefore will have to pay the full rate, but you can use the unused TRS that is available to first time buyers for an additional 4.5 years
 
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Thanks Clubman,
Yip I'm within the limits of the rent a room scheme - as long as the limit is still at €7,620? This leads me onto another question - if I rent out my room when I move out, I presume that it is no longer my PPR? i.e. can I say that even though I am renting somewhere else that my house is still my PPR as it is the only place I have a mortgage on?
Also if I do rent out my room and decide to sell in 2 years time (ie still within the 5 years of having bought it) will I then have to pay CGT and/or SD clawback.

Apologies for making it so complicated - just considering my options at the moment.

Thanks,

Rebelman.
 
asdfg said:
When you purchase in future you will not be a first time buyer in relation to stamp duty so therefore will have to pay the full rate, but you can use the unused TRS that is available to first time buyers for an additional 4.5 years
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What is TRS? Could you explain a bit more what you mean by the above - thanks.
 
Rebelman said:
Thanks Clubman,
Yip I'm within the limits of the rent a room scheme - as long as the limit is still at €7,620?
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Yes.
This leads me onto another question - if I rent out my room when I move out, I presume that it is no longer my PPR?
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If you keep renting rooms and rent out your own room after moving out (and certainly if you start collecting more than €7,620 p.a. in rental income) then in all likelyhood the property will no be treated as a PPR but will be a rental property and that would trigger the SD clawback and other tax implications. If you were not renting it out at all and moved out and sold it within 12 months then there would be no tax implications. If I was you I could get independent, professional advice on the implications of moving out but keeping it rented out while you rent elsewhere. I am pretty sure that there would be tax (SD clawback, rental income tax and/or CGT) implications.
i.e. can I say that even though I am renting somewhere else that my house is still my PPR as it is the only place I have a mortgage on?
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Presumably that would be a false declaration so no.
Also if I do rent out my room and decide to sell in 2 years time (ie still within the 5 years of having bought it) will I then have to pay CGT and/or SD clawback.
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See above.
 
can I say that even though I am renting somewhere else that my house is still my PPR as it is the only place I have a mortgage on?
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No, when you live is considered your PPR. You would be considered an investor and you have to make returns to revenue showing Profit/loss on the rental income even if the rental income is below the rent a room limit of 7,620. See [broken link removed] for details of how to calculate the profit/loss from rental income

You also have to pay SD at the investots rate applicable at the time you purchased the property. The SD is payable on the date you rent out the property so in your case immediately you move out.

You also have to register with the Private Residential Tenancies Board (PTRB) in order to claim the interest on the mortgage which is probably the largest deductable you will have in calc your profit.
 
asdfg said:
You also have to register with the Private Residential Tenancies Board (PTRB) in order to claim the interest on the mortgage which is probably the largest deductable you will have in calc your profit.
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Would the largest deductible not be more likely to be mortgage interest?

Anyway - if you do decide to become an investor check out this FAQ:

Property Investment FAQ

As I keep saying you should get independent, professional advice on the tax and maybe investment aspects of your various options.
 

Is that not what I said???

Let me put it another way
In order to claim the Mortgage Interest you first have to register with the PRTB.
 
Thanks for all the info.
Clubman - as you say I need to get independent, professional advice - I just thought I'd ask here, as I said I am only considering my options at the moment.
What about this scenario: I keep one room in my house (for myself) - rent out the other two rooms (staying below the €7,620) - rent out a room somewhere myself - can I then say that the house is still my PPR
Again - apologies for the complicated scenarios - just need to consider my options - I will get independent, professional advice, but just want to think about my options first and know what I plan on doing when I get the independent, professional advice .

Thanks.
 
Rebelman said:
What about this scenario: I keep one room in my house (for myself) - rent out the other two rooms (staying below the €7,620) - rent out a room somewhere myself - can I then say that the house is still my PPR
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No - because it's not your PPR based on the details posted so far and to claim that it is would be fraud/tax evasion.
 
Hi Clubman,
Thanks for the quick reply. All the questions above are nothing to do with tax evasion - they are all just genuine questions from someone that does not have any knowledge about PPR/CGT/Stamp duty clawback. I have never avoided paying tax, and do not intend to - I see it that in the long run it would not be worth it.
 
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