We also lived in the house until 2004 so that will change the CGT calculation even further.
I also believe the last 12 months of ownership is also deemed to be PPR if you had lived in the house at some stage. I was advised this when I was calculating the capital loss on our one
Plus indexation up to 2003
Good point
the OP would be bonkers to sell the property
I guess some of this is a discussion for the OP on whether they wish to be a landlord or not. There are may people who are simply not cut out to be landlords, although if they have been one for 12 years it should be an easy enough decision to make for them. If they dont mind it, then its something they definitely need to consider
...AVCs are the sensible play thereafter.
If I was the OP, I would look at doing a cashflow projection over a number of years, reflecting the cost of education and other major expenses on the family. They are carrying a reasonable level of savings, so that should not be an issue. If they can make 5k after tax, and the mortgage repayments are 580/month, they will probably just about break even cash flow until 2031
*Maybe my figures are wrong here, so someone can correct me if I am wrong*
Rental Income €13,200
Interest expense €1,140
Other expenses estimate €1,500
Tax at 50% €5,422
Profit after tax €5,138
Mortgage Principal €5,820 (580*12 - 1140 (interest calculation above))
Cashflow Negative €682
However, in 2031 (14 years time) there will be a nice income return (~8k assuming lower tax rates) to supplement the available pensions (by around 20%) with minimal cost over the intervening time, as well as an asset for the kids in the future.
I think you are 16 years from retirement (from a comment above), so any income you make over the final 2 years can be placed into a pension so as to avoid the higher tax rates in that window.
But again, it is up to you but you do need to consider cashflow projections and what you would do with the funds if you sold and the return you would get on them.