Possibly selling my house

D

dublin100

Registered User
Messages
66
Hello all,
I would appreciate any advice which you may be able to give me.

I bought a house in 2003 for 206k. My best guess is that it would now sell for approx 170k. It has been rented out since mid-2008. I have €175k left on my mortgage.

If it sold for 170k can avoid paying capital gains tax or some other form of income tax as I'd have to pay off the mortgage?

Thanks
 
Mortgage has no effect on CGT.

If you sell house for 170k then you will have a capital loss = 170k - 206k = -36k so no CGT will be due.

Some or all of the loss may be used to offset other capital gains in same year or in future years.

Obviously, you will have to pay of all of the morgtage so if you sell for 170k then you will have to come up with 5k plus any selling expenses
 
Well if you sell for less than 206K (probably 210K as expenses are allowable) then you would have no CGT liability.

Even if you sold for more it would only be on the percentage of time since mid 2009 (mid 2008 + 12 months).

For example:

Sell for 220K in mid 2011.

(2 years of liability / 8 years of ownership) * 10K of gain @ 25% = 625 Euro.

Even then there's more likely a CGT allowance of 1.275K per annum that that CGT liability could be offset against.

What might be more interesting is that in your situation you'd be incurring a capital loss which could possibly be carried forward against future CGT liabilities. That you should talk to an accountant about.
 

i reckon you made a capital loss which can be offset against a capital gain. However it only applies to the period you were renting out the house.

so 206-170 = 36k
2 years rented / 8 years ownership = 1/4
so the capital loss is 9k. You might want to run that by a tax accountant!

by the way, if you were in receipt of trs during the period it was being rented out I probably wouldn't bother drawing attention to this fact.
 
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