Rent out PDH for 1 year before selling it. CGT implitactions?

[landlord]

If I rent out my PDH for exactly one year before trying to sell it. Then say it takes 6 months to complete the sale, do I have any capital gains tax liability?
Also if I rent out the house for 2 years, then take 6 months to sell it what would my liability then be?

 

[Satanta]

PDH? Do you mean PPR?

If it was PPR....

your last twelve months before sale are still eligble for consideration as your PPR, so no CGT liability arrise from you renting during this period.

If you rent for 12 months, then another 6 months for sale, it would be considered as 6 months of the entire time of ownership as eligible for CGT (18 months - 12 months = 6 months). Lots of other threads cover CGT liabilities with sample calculations.

If you rented for two years, then six months to sell, your CGT liability would be 30 months (2.5 years) - 12 months (exemption) = 18 months of total ownership time liable for CGT.

This doesn't take into account the possible SD clawback for renting within five years of buying a house exempt from SD through being an OO.




If you did mean PDH and not PPR I have no idea what the situation is as I've never come across that term before

Edit:
Principal Dwelling House (PDH) (or Principal Private Residence (PPR))
Where the property being purchased is occupied by the borrower as their principal place of residence (PPR)

 

[landlord]

PDH? Do you mean PPR?

If it was PPR....

your last twelve months before sale are still eligble for consideration as your PPR, so no CGT liability arrise from you renting during this period.

If you rent for 12 months, then another 6 months for sale, it would be considered as 6 months of the entire time of ownership as eligible for CGT (18 months - 12 months = 6 months). Lots of other threads cover CGT liabilities with sample calculations.

If you rented for two years, then six months to sell, your CGT liability would be 30 months (2.5 years) - 12 months (exemption) = 18 months of total ownership time liable for CGT.

This doesn't take into account the possible SD clawback for renting within five years of buying a house exempt from SD through being an OO.




If you did mean PDH and not PPR I have no idea what the situation is as I've never come across that term before

Edit:
Principal Dwelling House (PDH) (or Principal Private Residence (PPR))
Where the property being purchased is occupied by the borrower as their principal place of residence (PPR)

Thanks for the reply.
The property is my home or PPR.
I have currently lived in the property for 5 years and 2 months, so say I sell in 18 months from now after renting it for the first 12 of those months. How much stamp duty will I actually pay if the value of the house is X when I come to sell it?

 

[Satanta]

I have currently lived in the property for 5 years and 2 months, so say I sell in 18 months from now after renting it for the first 12 of those months. How much stamp duty will I actually pay if the value of the house is X when I come to sell it?

1) Total period of ownership: 80 months (5*12 + 2 + 18)
2) Total non PPR period: 18 months
3) Final 12 month Exemption: 12 months
4) CGT Non PPR period: 6 months (2 - 3)

CGT liability = Taxable consideration * 6/80 (4/1)

Taxable consideration = X - purchase price - deductables

(check the official Revenue site to see what costs [selling costs etc.] are deductable)




No SD clawback as you've owned over 5 years.

 

[Newby]

Stamp Duty clawback occurs if the property is rented within 5 years of acquisition. Assuming you bought it over 5 years ago, i dont think there would be a clawback. Ask an advisor for sure though!

 

[landlord]

Thanks so much. I understand how it works now !!!! The only reason why I am looking to rent it for a year is to wait till stamp duty is reformed. I am sure that will give some kind of boost to the property market before I sell it. Currently the expected rent will be slightly more than the mortgage....... So heres hoping that property prices dont drop in the short term !!!!!