Should I sell property and max pension contributions?

[moneymakeover]

This would be relevant if there were capital gains to be banked with reduced tax at present. However, the OP would have no capital gains if selling now.

Did you read Sarenco's post above? It has explained that the fact that the OP previously lived in the house is a factor in retaining the rental due to the CGT situation. They have given good advice and the explanation is very clear and understood.

Now you're changing your argument suggesting there are no capital gains?,
Today he might not have capital gains... I'm talking in the future.
My point is the percentage tax would increase.. Do you disagree? Do you need to pull in others for support?
If you don't understand the point... Don't comment.

 

[MrPaws]

That’s a very valuable CGT “shield” that would argue in favour of retaining the rental.

Say you sold the property after 20 years ownership, you would only pay CGT on 7/20 of the realised gain (less disposal expenses, etc, less your annual allowance).

As things stand, if you sold the rental and made a 20% AVC, you would end up with (very) approximately €44k pa after tax.

On the other hand, if you kept the rental and made a 20% AVC, you would end up with (very) approximately €32k pa after tax and €18k mortgage payments.

But of course you would still have the rental, which would be a useful source of income in retirement.

I still think, in your shoes, I would sell the rental and simplify your life by paying off the PPR mortgage.

But that’s a fairly fine call.

Thanks for this - I had completely forgotten about the CGT rule and assumed I would have to pay the entire 33% on any gain. Changes things marginally but probably not in favour of keeping.