Do income tax rates apply to sale of properties in negative equity?

daigo75

I'm not sure this is the right forum, feel free to move the post if it's not.

I was talking to a friend about current situation of housing market and we ended up on the topic of sales due to negative equity. We imagined a scenario where John Doe owns a property, and he must sell it to repay the bank. Let's say that he sells it for 100. Does John Doe get 100 to give to the bank, or does he get only 50 (estimating about 50% of income tax, PRSI, etc)?

Thanks in advance for the answers.

Frank Lee Midere

daigo75 wrote: »

I'm not sure this is the right forum, feel free to move the post if it's not.

I was talking to a friend about current situation of housing market and we ended up on the topic of sales due to negative equity. We imagined a scenario where John Doe owns a property, and he must sell it to repay the bank. Let's say that he sells it for 100. Does John Doe get 100 to give to the bank, or does he get only 50 (estimating about 50% of income tax, PRSI, etc)?

Thanks in advance for the answers.

You don't pay income tax on capital sales. You pay capital gains tax. And you only pay capital gains if you are in profit. And all this is moot if he is the homeowner because a persons home isn't taxed.

apeking

If it is a buy to let 35% capital gains tax may apply. Unlikely to be an issue if in negative equity