Rent out house - questions!

M

matei

Guest
Hello all,

We are currently abroad and about to rent out our house while we are away, most likely 2 - 3 years. We can get around €800 - €850 a month in rental, which should just about cover our mortgage payment.

We're going to rent the house rather then sell it now because it has gone up in value quite a bit since we purchased it and appears that it will continue to do so (to a lesser extent).

When we do go to sell it, will we be liable for capital gains tax? If so, is it possible to take it off the rental market, register the house as our primary residence again and then sell it a short time later?

cheers!
 
This thread among many others deals with the CGT treatment of a property that was both a PPR and a rental property. Note that if you rent within 5 years of purchase then a clawback of stamp duty also applies.
 
You may also need to inform your lender and will most likely need alternative home insurance cover if the property is rented. Do you calculations as to how much rent covers the mortgage take into account rental income taxation and other expenses?
 
Hi,

i am confused about this. i bought my secondhand house as a ftb for under the stampduty threshold.2 years ago. i was hoping to head off around the world and rent it out in the meantime. I will sell it upon my return. Even tho house was exempt from stamp duty when i bought it, will i be liable for stamp duty now? i've read the revenue commissioner leaflet on this subject, but it doesn't answer my question.
This site is brilliant by the way!
 
wexford said:
Even tho house was exempt from stamp duty when i bought it, will i be liable for stamp duty now?
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If an investor would have paid more stamp duty on the purchase than you did (which is presumably the case) then you are liable for that once you rent the property out. See . Revenue [broken link removed] this:
WHEN DOES A CLAWBACK ARISE?

A clawback arises if rent is obtained from the letting of the house, other than under the rent-a-room scheme. The clawback amounts to the difference between the higher stamp duty rates and the duty paid. It becomes payable on the date that rent is first received from the property if rented (other than under the rent-a-room scheme) within five years from the date of the current purchase.
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Don't forget the CGT, rental income tax and mortgage interest relief implications either.
 
You should get independent, professional advice before jumping to any conclusions especially based on my comments! I am not an expert.
 
you seem to know your stuff! :) however, i have queried this with the revenue commissioners and will post their reply here..

;)
 
Thanks. Revenue will only provide information (and not always accurately!) and not advice. You should always seek independent, professional advice on significant investment/tax issues.
 
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