Moving.. Sell or rent?

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Nice Day

Guest
Hi, Have run through this site but no joy on some answers.. We are moving soon and would appreciate if you could shed some light on this..

Current home - value 400k - Remaining mortgage 240K, tracker.
New home (New build) - 605K

Would it be advised to sell now and take the profit of 160k or rent it. (approx 1300pm)
Balance on new PPR 575k after deposit paid.

I understand that if we rent, we will be liabel for stamp duty and CGT but feel if we sell now we might regret it as the area our current house is in, houses are usually snapped up and with a probable no stamp duty for FTB's after the general election, the price will probably increase over the year.

I cant find info on this but hear if we we're to rent the curent house for less than 12 months, we a NOT subject to CGT?
Does this apply to stamp duty aswell?
If this we're the case, we could rent it for 11 months @ interest only, then put it on the market.

If we we're to rent long term, interest only would be apporox 975pm on the 240k.

@ 1300pm rental, what % would we be subject to in yearly rental income tax?

Also, how do you calculate stamp duty on a current PPR you are about to rent if you did not pay stamp duty originally?

Advice appreciated :eek:
 
I cant find info on this but hear if we we're to rent the curent house for less than 12 months, we a NOT subject to CGT?
Does this apply to stamp duty aswell?
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I don't think this is the case. If you buy your new home and there's an overlap of up to 12 months selling your old, there's no CGT issue, to facilitate delays in selling. But if you rent in the meantime, I think that triggers immediate CGT and Stamp Duty issues. I'm not a tax professional so you should seek advice from one before making any decisions.

@ 1300pm rental, what % would we be subject to in yearly rental income tax?
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€1,300 rent less mortgage interest less rental agency fees (if applicable) less life assurance mortgage protection premium is taxable at your highest rate - Income Tax.

Also, how do you calculate stamp duty on a current PPR you are about to rent if you did not pay stamp duty originally?
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It's the full amount of Stamp Duty you would have paid at the time you bought it.

Liam D. Ferguson
www.ferga.com
 
Thanks for advice..
Does anyone know the situation in renting a property within the 12 months therefor avoiding SD and CGT?

Thanks again :eek:
 
Nice Day said:
I cant find info on this but hear if we we're to rent the curent house for less than 12 months, we a NOT subject to CGT?
Does this apply to stamp duty aswell?
Click to expand...
SD clawback only applies if you rent the property out within 5 years of the original purchase as an owner occupied PPR. CGT one some portion of any resale gain applies if you don't sell it within 12 months of vacating it as your PPR.
Also, how do you calculate stamp duty on a current PPR you are about to rent if you did not pay stamp duty originally?
Click to expand...
If the clawback applies as above then you are liable for the SD that an investor purchaser would have paid on the original purchase.

You should get independent, professional advice.
 
Overview points which should be considered.

You now have a €1m plus of exposure to a single asset class in a single market with 80% leverage where prices have already quadrupled in 10 years.

Also Renting a property for 11 months will mean significant wear and tear - probably knock 10k off the value of the property minimum
 
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