Selling properties with mortgages

summereire

If a property has a value of say €250k, but also has a mortgage secured upon it of €150k, how would this typically be dealt with on sale from a CGT perspective if the buyer was taking on the mortgage from the seller?

Are the property value and mortgage amount offset again each other leaving €100k gain, and this is charged? Or are they seen somehow as two different transactions?

This example is entirely hypothetical and anyone considering such a transaction should seek professional advice. Seems to be lots of info on this type of thing in places like the States, but much less so here.

Any ideas?

Valetta

The mortgage has nothing to do with CGT.

summereire

Valetta wrote: »

The mortgage has nothing to do with CGT.

Thanks, in that case if a debt is passed from one person to another are there implications for that?

Citizenpain

summereire wrote: »

Thanks, in that case if a debt is passed from one person to another are there implications for that?

I imagine CAT would apply to the person whose debt was taken on

Gaillimh1976

CGT would be based on the sale price versus the original purchase price

So if you bought for 200 and sold for 250 you would pay tax on the 50

Also AFAIK your family home is exempt

Valetta

I'm not sure what you mean by a debt being "passed on"?

If there is a mortgage on the house and you want to sell it, as soon as it is sold the mortgage must be cleared.

The buyers arrangements regarding taking out a mortgage are completely separate.

summereire

Valetta wrote: »

I'm not sure what you mean by a debt being "passed on"?

If there is a mortgage on the house and you want to sell it, as soon as it is sold the mortgage must be cleared.

The buyers arrangements regarding taking out a mortgage are completely separate.

Yes I'm talking about a situation where the buyer takes on the mortgage on purchase of the property. This is more common in places like the States from what I can see. Maybe an analogy for it would be buying a business that has assets (the building) and debts (the mortgage).

summereire

Citizenpain wrote: »

I imagine CAT would apply to the person whose debt was taken on

Yes that seems likely. I'm wondering then if they're both seen as essentially separate events, the transfer of the mortgage, and the transfer of the property, or if they relate to each other or offset as in the above example.

Alan Shore

Ban pending for everyone involved read the charter.

Mr. Incognito

This example is entirely hypothetical and anyone considering such a transaction should seek professional advice

Bingo.

Thread closed