Renting 1st home briefly

bazwaldo

If, after moving to a new house, I rent my previous main residence of many years, and decide a year later that being landlord isn't for me, do I have to pay CGT if I sell the property at a profit, rather than being exempt as it was my main residence?

Or in other words, if I rent out my old main residence, do I immediately forfeit the exemption from CGT of selling my main residence?

Mr. Incognito

No you just adjust the exemption for the period it was not your ppr so for example ppr for 19 out of 20 years you pay 1 20 th of the CGT bill

nompere

Mr. Incognito wrote: »

No you just adjust the exemption for the period it was not your ppr so for example ppr for 19 out of 20 years you pay 1 20 th of the CGT bill

That's not quite correct.

You work out the gain, then calculate 1/20th of that gain, then reduce the chargeable gain by the personal allowance, and finally work out the tax.

bazwaldo

nompere wrote: »

That's not quite correct.

You work out the gain, then calculate 1/20th of that gain, then reduce the chargeable gain by the personal allowance, and finally work out the tax.

Thanks for the clarification.

I found an example too in http://www.revenue.ie/en/tax/cgt/leaflets/cgt1.pdf, Chapter 11, example 11, Pg 33.

namenotavailablE

Worth also noting that if the period of non-occupancy renting is 1 year and this occurs in the final 12 months of ownership then you'd be deemed to have occupied it for the entire period of ownership- the last 12 months are deemed to be a period of occupancy even if you are not occupying the house.