Capital Gains Tax - property

africates

Hi, can anyone shed some light on the issue here. Property bought in December 2011 for lets say 100k and was till now sole and main residence and is now worth 200k. Another property bought now and the flat will be rented. If the flat will be sold in 10 years for 250k will Capital Gains Tax be paid on 150k or on 50k? Any revenue materials covering the subject or 1st hand knowledge will be appreciated.

CIARAN_BOYLE

the tax will be on the gain of 150k but there's partial relief because it was your ppr.

in this case it was your ppr for 6/16th of the time in ownership so you owe tax on 10/16s of the total gain.

scroll down to partial exemption here for an explanation

https://www.charteredaccountants.ie/taxsource/1997/en/act/pub/0039/nfg/sec0604-nfg.html

exaisle

I think it will be 9/16th because the last 12 months of ownership is disregarded.....

Every little bit helps...

africates

Hi and thank you for answers! I am seriously considering now if I should let the apartment or leave it for a while and sell it. If I won't rent it out but it won't be my sole residence will I need to pay any tax if I sell it in 2 years (E.g. 6 years of sole residency + 2 years left unrented).
I am thinking of doing this as lets say property gained in value 150k in 8 years = 50k TAX . If I rented it and sell it in 2 years I'll need to pay 2/8 of the tax which is 12500k.
Rent for 2 years is 36k - 3000 management fee - 3600 letting agency fee = 29400 - 50% TAX = 14700 gain - 12500 tax = 2200 gain for all the hassle......
If there anything we can do within law? The property is jointly owned by me and my wife however shes not returning to work... can she rent it out so she's within 20% tax basket?
Can I move the ownership of the property to retirenment fund or open ltd company and acquire the property from myself?
thanks!

exaisle

africates wrote: »

Hi and thank you for answers! I am seriously considering now if I should let the apartment or leave it for a while and sell it. If I won't rent it out but it won't be my sole residence will I need to pay any tax if I sell it in 2 years (E.g. 6 years of sole residency + 2 years left unrented).
I am thinking of doing this as lets say property gained in value 150k in 8 years = 50k TAX . If I rented it and sell it in 2 years I'll need to pay 2/8 of the tax which is 12500k.
Rent for 2 years is 36k - 3000 management fee - 3600 letting agency fee = 29400 - 50% TAX = 14700 gain - 12500 tax = 2200 gain for all the hassle......
If there anything we can do within law? The property is jointly owned by me and my wife however shes not returning to work... can she rent it out so she's within 20% tax basket?
Can I move the ownership of the property to retirenment fund or open ltd company and acquire the property from myself?
thanks!

Your calculation of CGT is incorrect. The correct figure is about €6,187.

Your calculation of "gain" is rubbish. You're only taking the income from the property, but you're deducting tax on the income AND tax on the capital gain. You have to compare like with like....

Think of it this way instead: Capital Gain 150,000; Tax 6,187; Net Gain after tax €143,813.
Income 29,400; Tax 14,700; Net Income after tax €14,700