How much capital gains tax to pay?

surfboarder101

Am planning to rent out my house for a year or 2 and travel. If I sell the house when I come back will I have to pay a lot of Capital gains tax?
How does it work ?

Thanks for any advice

ace_irl

The tax will be on the profit you make from the sale, so it will depend on how much you bought the house for and how much you sell it for. You will also be entitled to the annual CGT exemption of €1,270.

If it was your principal private residence up to the time you leave to go traveling you will get a certain level of exemption based on years you occupied it while owning it.

One thing to note is that if you rent it out for 2 years you will be required to file a tax return for your rental income.

You could look at selling the house before you go traveling, which (assuming you have lived in it for the entire time you owned the house) would limit you exposure to CGT and income tax from the rental aspect.

3DataModem

surfboarder101 wrote: »

Am planning to rent out my house for a year or 2 and travel. If I sell the house when I come back will I have to pay a lot of Capital gains tax?
How does it work ?

Thanks for any advice

The capital gain only applies for the period you are not living in the house... won’t be much in two years (unless you are very lucky). Also you get a year’s grace (ie one year is deducted).

Bold Abdu

Quick calculation would be as follows.

Say bought house for 100K on 1/1/15. You go travelling on 1/1/18. You sell on 1/1/20 for 150K.

Total Period of ownership = 5 years
As residence = 3+1 = 4

Gain = €50K
PPR Relief = 4/5 = €40K
Taxable €10K @ 33%
Tax = €3,300

There are various deductions along the way but that's basically how it works.