Should I revalue PPR prior to turning it into investment property?

FCBC12

New Member
Messages
9
Hi,
Two questions:
1) Will I pay stamp duty on a PPR if I get it revalued upwards? (revalued amount less original cost)
2) I bought my PPR 9 years ago for €100,000. Paid stamp duty. I get the house revalued today at €150,000. Tomorrow, I move and subsequently then rent out the house. In 11 years, I sell the house for €200,000. Under today's rules, how much CGT would I pay?

Thanks in advance.
 

asdfg

Frequent Poster
Messages
1,583
Question 1 No

Question 2
Back of envelope calc approx 16,500
Gain 100,000
No of years as investment 10 ( 1 year is discarded)
No of years owned 20
Gain 100,000 /20*10=50,000*33%=16,500
Deductions can be made for stamp duty auctioneer fees and solicitor fees.
 

FCBC12

New Member
Messages
9
Question 1 No

Question 2
Back of envelope calc approx 16,500
Gain 100,000
No of years as investment 10 ( 1 year is discarded)
No of years owned 20
Gain 100,000 /20*10=50,000*33%=16,500
Deductions can be made for stamp duty auctioneer fees and solicitor fees.
Thanks. So there is no benefit in getting house revalued upwards now while it is a PPR?
 

Brendan Burgess

Founder
Messages
38,710
No. There is no such thing as "revaluing it" . That does not come into the CGT calculations.

And here is something to consider.
If you sell it within a year of today, you will pay no CGT.

If you sell it in 10 years time for €150k , its current value, half the gain is subject to CGT even though all the gain arose while it was you PPR.

So, very simply,
Gain €50k
PPR relief: 50%
Gain subject to CGT: €25k
CGT @33% = €8,300

Even if the property falls in value over the next 10 years, you could still pay CGT.

Brendan
 

FCBC12

New Member
Messages
9
No. There is no such thing as "revaluing it" . That does not come into the CGT calculations.

And here is something to consider.
If you sell it within a year of today, you will pay no CGT.

If you sell it in 10 years time for €150k , its current value, half the gain is subject to CGT even though all the gain arose while it was you PPR.

So, very simply,
Gain €50k
PPR relief: 50%
Gain subject to CGT: €25k
CGT @33% = €8,300

Even if the property falls in value over the next 10 years, you could still pay CGT.

Brendan
Thank you. That is clear.
 

NoRegretsCoyote

Frequent Poster
Messages
923
Just think of yourself as accruing a tax liability of €1650 a year for every year that you let it from now on.

Factor it into your overall sums when working out whether it's worth letting it or not.
 

llgon

Frequent Poster
Messages
430
Looking at the positive side, if the property was to rise in value by 100k over the next ten years, you would only be liable to CGT on 75k of this.

Swings and roundabouts.
 

moneymakeover

Frequent Poster
Messages
498
Gain: 150k
Relief: 50%
Subject to CGT: 75k
@33% : 25k

Sell now gain 150
Increase to 200 in 10 years gain: 200 - 16.6 = 183.3
Increase to 250 in 10 years gain: 250- 25=225
 

Gordon Gekko

Frequent Poster
Messages
3,740
An increase of 100k over the next ten years would give a total increase of 150k, half of which would be exempt from CGT. Moneymakover has the calculation above.
It was poorly worded. On an increase of €100k from here, €50k of it would be taxable. But I get what was meant.
 
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