Moving Back to Investment Property

[Unregistered]

Hi, can anyone confirm if we were to sell our ppr and move back to our investment property (making it our ppr), what is the situation with CGT if/when we eventually sell it? I have spoken to someone in Revenue and was told there would be no CGT liability at all because it would be our ppr when we sell it. Is it just me or does this seem a bit unlikely?

A separate question if anyone could answer please..... We lived in the investment property for 3 years before we purchased our current ppr. If we sell the investment property I think we are liable for stamp duty clawback. I can't seem to get hold of anyone in Revenue who can confirm this and who can tell me how much the liability would be. Does anyone know how this is calculated? We bought the property 10 years ago and received the FTB grant. We are trying to make a decision on whether to sell either or both properties and obviously avoid major tax liabilities if possible along the way so any advice is welcome! Thanks in advance

 

[stuart]

Hi, can anyone confirm if we were to sell our ppr and move back to our investment property (making it our ppr), what is the situation with CGT if/when we eventually sell it?

If you to sell i now or after moving back in, any gain would be calculated as if it was always an investment BUT then this gain would be reduced for when the property was used as your PPR (pro-rata on a time basis)

Depending on why you left the original property may make it exempt completely as long as you move back in before you sell it (Revenue may be correct)

If you left for emplyment reasons then it will be exempt

If we sell the investment property I think we are liable for stamp duty clawback

If you have owned for more than 10 years, then there is no stamp duty clawback

stuart@buyingtolet.ie

 

[eamonn66]

(increase in value / total years owned) *years let out *cgt rate (currently 20%)


100k gain
owned 10 years
rented 4

(100k/10)*4*20% = 8000

i could be wrong i think you might be able to forget about 1 of the years it was let out but that might only apply if you rented it at the end of your period of ownership.

 

[stuart]

Roughly speaking, but don't forget indexation, 1.248 in Jan/Mar 95 or 1.218 Apr/Dec 95

 

[Unregistered]

Thanks for the replies.
Stuart no we didn't leave for employment reasons, we saw an opportunity to purchase a house and hold onto the apt as an investment. In this sistuation, does it look likely we would have a CGT liability on moving back to the apt and eventually selling it? In which case we may be better off selling it sooner rather than later as we wouldn't be reducing our tax bill by making it our ppr again.

Just so I'm clear, are you saying that because we bought the apt in 1995, if we were to sell it this year or any future year, we would not be liable for any stamp duty clawback? If we had sold it last year we would have been liable for this, is that correct?

Eamonn thanks for the calculation.

Just one other thing, if we do go ahead and sell the investment property, how much should we expect to pay a professional for calculating our tax liability? Also would you recommend we seek professional advice at this stage i.e. would that help us in making our decision re both properties. Should we get a tax expert or a financial advisor? Sorry for all the questions but we've managed up to this without the professionals so we're not too sure who we should be seeking advice from. Again thanks for the help.