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Capital Gains Tax on Property Development

  • 23-09-2014 4:15pm
    #1
    darby5250
    Registered Users, Registered Users 2 Posts: 19 ✭


    I am currently looking into the idea of buying a small development site to build four new apartments on. I am trying to get an idea on the costs of taking on a project like this (Building, Architect fees, Planning Permission, Council Contribution fees, etc...)

    I know the standard Capital Gains TAX rate is 33% when selling a house or apartment, but as this will be a property development I'm not sure how much Capital Gains TAX I can expect to have to pay upon selling each apartment unit?

    Any constructive feedback posted here or sent to me by PM would be gratefully appreciated.

    Thank You in advance
    Tagged:


Comments

  • #2
    Victor
    Registered Users, Registered Users 2 Posts: 78,579 ✭✭✭✭Victor


    You would be well advised to engage a solicitor and/or accountant with experience in construction. Depending on the exact format the construction takes, CGT might not apply, e.g. if you proceeded with the construction as a business instead of a capital gain..

    * Building - this will depend on many matters, including the target market you are going for (chrome taps or gold taps?), building shape, number of storeys, site accessibility
    * Architect fees - all professional fees together should come to no more than 15% of construction costs.
    * Planning Permission - a few hundred in fees to the council + part of the design fees.
    * Council Contribution fees - will depend on the individual location - check the council website. There may be secondary contributions to other projects.


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