Selling Rental Property & Capital Gain Query

Hi all,

Fantastic website and great source of information.

Query around capital gain on sale of rental property.

Bought a property in 2003
Lived there until 2013
Rented out from 2013 to date

Property purchase price in 2003 - €80k
Top-up mortgage for renovation(roof, plastering, wiring) + €40k
Remortgage for extension in 2009 + €180k so total mortgage of €300k

Current value €300k
Outstanding mortgage €230k

My queries:

1. Is there capital gains to be paid if I was to sell the property for €300k?

I had initially thought not as the remortgage of €300k is equivalent to the re-sale value but having queried with a financial advisor prior to arranging a consultation with him he was on about my initial mortgage of €80k. The re-mortgage was used for the extension.

2. Are the services of this advisor necessary to sort the CGT if applicable for the sale of the property.

Any info greatly appreciated.

Tks In advance.

I don't think the money paid for the renovation will be allowable for CGT but the extension should be once it's still there. I'm assuming that the extension cost €180k rather that some of the money going to other things.

That's a gain of €40k. You can take any fees paid to purchase or sell the house off that too btw.
You get PPR relief of 11/18 of that (10 years living in the house plus the last year of ownership out of 18 years owned).
That leaves a chargeable gain of 15,555.
You get 1270 personal exemption off that leaving 14285 @33% = €4,714 CGT owed.

Mortgage is not relevant in calculating CGT.

Mortgage figures are not relevant.

What is relevant is amount spent on improvements.

Thanks Ciru75 & Protocol for the feedback and putting some figures to it. Improvements is the key factor here. Get ya.

The extension is still there( when I say extension it was 1600sqft hence the big cost).

Is it just a case of going online and completing a return on the ROS website?

As regards documentation of improvements, what happens if I don’t have all the receipts to verify the costs?

Tks again.

Blue32 said:

Thanks Ciru75 & Protocol for the feedback and putting some figures to it. Improvements is the key factor here. Get ya.

The extension is still there( when I say extension it was 1600sqft hence the big cost).

Is it just a case of going online and completing a return on the ROS website?

As regards documentation of improvements, what happens if I don’t have all the receipts to verify the costs?

Tks again.

Click to expand...

The subject of receipts will only come up if Revenue choose to query your return.
Invest in a decent pro-active accountant rather than rely on the internet.
What you can and can't claim for is pretty much black and white.

Thanks Wahaay - good advice.