Rent out PPR and move abroad. CGT Implications Questions

P

Puddin

Registered User
Messages
18
Hi All,

If i was to move abroad in a few years time and spend say 5 years away whilst renting out my PPR in Dublin for those 5 years,then subsequently sell the house:

1. Am i liable for CGT only on the amount the house price has increased in those 5 years or for the whole time between buying and selling the house ?

2. If i was to return and live in the house how much time would have to pass before i'm no longer be liable for CGT if i sold it as its my PPR again ?

The reason i ask is if in those 5 years away the rental paid about €70,000 off my mortgage and then my CGT bill was close to that it's probably not worth my while to rent house out unless property prices were increasing.

I had a look at the revenue website but it wasnt clear to me.

Many thanks in advance for the advice,

Aidan
 
if you bought for say 300,000 and lived in it for 9 years, then rented it out for 5 years and returned and sold it for say 500,000.

You occupied the house for 9 years (plus additional year as per Revenue rules) so that's 10 years total and rented it out for 4 years (not 5, as you can claim one additional year as your occupancy).

You owned the house for 14 years and it was rented out for 4 years or 2/7 of the time. Therefore 2/7 of the profit (gain) is taxable.

You can put solicitors fees (buying and selling) stamp duty, engineer fees, estate agent fees etc all against your gain (so call that lot 20,000).

Your taxable gain is 500,000 minus 300,000 minus 20,000 equalling 180,000. 2/7 of that is 51,428 euro approximately.

You have a CGT allowance of 1,270 euro annually, so that brings is down to 51,428 minus 1,270 equalling 50,158 euro. CGT is 33% I think so your bill would be 16,552 euro.




if you bought for say 300,000 and lived in it for 19 years, then rented it out for 5 years and returned and sold it for say 500,000.

You occupied the house for 19 years (plus additional year as per Revenue rules) so that's 20 years total and rented it out for 4 years (not 5, as you can claim one additional year as your occupancy).

You owned the house for 24 years and it was rented out for 4 years or 1/6 of the time. Therefore 1/6 of the profit (gain) is taxable.

You can put solicitors fees (buying and selling) stamp duty, engineer fees, estate agent fees etc all against your gain (so call that lot 20,000).

Your taxable gain is 500,000 minus 300,000 minus 20,000 equalling 180,000. 1/6 of that is 30,000 euro approximately.

You have a CGT allowance of 1,270 euro annually, so that brings is down to 30,000 minus 1,270 equalling 28,730 euro. CGT is 33% I think so your bill would be 9,481 euro.
 
Puddin said:
I had a look at the revenue website but it wasnt clear to me.
Click to expand...
There are a few different exemptions, that might not apply to you.

One of them is if you go abroad for up to 4 years as part of your employment, then your exempt from CGT for that period on the condition you return to live in the house before selling it. If this doesn't apply in your case, then it's as per previous post. You don't have tiivd back in, but the final year will be treated as if you were living there.

Whether you rent it out or not, you'll still be liable to CGT if it's not your PPR.

If you post more specific details, you might get a clearer response.
 
You can put solicitors fees (buying and selling) stamp duty, engineer fees, estate agent fees etc all against your gain (so call that lot 20,000).
BourbonWithIce said:
You can put solicitors fees (buying and selling) stamp duty, engineer fees, estate agent fees etc all against your gain (so call that lot 20,000).
Click to expand...
Are you sure that stamp duty (paid when you purchased a property) is deductable like solicitors fees when arriving at your taxable gain? Revenue web site doesn't mention it only auctioneers/solititors fees??
 
Hi all, not sure if this is correct thread but here goes..
I have a rental property , and wondering about selling. details
purchased 2008 as ppr for 310000
rented out in 2010 as moved
current rent 1350 p/m
outstanding mortgage 179000
current value 290000 aprox
wondering if I should sell to pay off other mortgage 72000, and am I liable for cgt ??
 
Rental income ----- income tax

Capital gain -------- CGT


Two different taxes on two different events.


Annual income tax on annual rental income.

CGT on any gain from disposing of an asset.
 
Hey folks,

Would love some advice please

Currently working abroad for Irish company for the last 6 years and rented out residence for those 6 years and now looking to sell property from abroad. Lived in the property prior to this as main residence for 10 years. Have paid taxes on rental etc for those 6 years and registered landlord.

Q. If I don’t make any profit from original purchase price (390k) - sells for 380 for example. Do I still need to pay CGT ?

Q. If it sells for over 390k, and I was required to work abroad by my employer and all of my work duties are performed abroad, would I be get 'deemed occupancy' for the entirety of such a period ? Or would I have to come back and live in property for a period before selling to avail of no CGT

Thank you
 
Asky2022 said:
Q. If I don’t make any profit from original purchase price (390k) - sells for 380 for example. Do I still need to pay CGT ?
Click to expand...
No.

Asky2022 said:
Q. If it sells for over 390k, and I was required to work abroad by my employer and all of my work duties are performed abroad, would I be get 'deemed occupancy' for the entirety of such a period ? Or would I have to come back and live in property for a period before selling to avail of no CGT
Click to expand...

I don't think you can avail of any relief unless you come back to live for at least a while:

3.8 Certain periods of absence treated as periods of occupation In determining whether or not a house has been occupied throughout the period of ownership as a PPR, any periods of absence mentioned in sub-heads (a) and (b) below may be ignored so long as both before and afterwards the house has been occupied by an individual as his or her PPR. (A “principal” residence will include a residence agreed or determined to be such following a notice given by the taxpayer under Section 604(8) - see para 16)
Click to expand...

See section 3.8 here.

If your house was a 2006 purchase you will be lucky to make a profit. There may not even be a liability when you factor in selling expenses, personal exemption, period of absence, etc. If you do have a liability it will be very small so I wouldn't factor CGT into your calculations about selling up.
 
You must log in or register to reply here.
Back
Top