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AirBnB and Capital Gains Tax

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  • 26-01-2018 12:03pm
    #1
    netflix2018
    Registered Users Posts: 12 ✭


    Hi,

    I rented one of our rooms for a few weeks on AirBnB last year and decided it wasn't for me for various reasons. I've heard that CGT is applicable to house sale if you have rented it out commercially. Is that the case regardless of when and for how long you rented out a room? Thanks.
    Tagged:


Comments

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    #2
    ted1
    Registered Users Posts: 23,320 ✭✭✭✭ted1


    Were you living there ? Was it your principal primary residence?


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    #3
    EagererBeaver
    Registered Users Posts: 6,415 ✭✭✭EagererBeaver


    Were you also living there at the time as your PPR?


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    #4
    netflix2018
    Registered Users Posts: 12 ✭netflix2018


    Yes, we were living there.


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    #5
    EagererBeaver
    Registered Users Posts: 6,415 ✭✭✭EagererBeaver


    Full exemption from CGT for your PPR.


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    #6
    Fian
    Registered Users Posts: 2,188 ✭✭✭Fian


    EagererBeaver wrote: »
    Full exemption from CGT for your PPR.

    It's a little more complicated.

    PPR= "principal PRIVATE residence". It doesn't just mean "your principal residence" it also must be a private home. So PPR relief does not apply where, e.g., a hotel in which the owner lived is sold.

    I think it is unlikely you would lose PPR status on the basis of a few weeks airbnb rental - but I am not a tax expert. At worst I expect you would only lose one year of PPR - so if you held the house for 20 years worst case scenario would be a CGT liability for 1/20th of the gain over that period.


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    #7
    EagererBeaver
    Registered Users Posts: 6,415 ✭✭✭EagererBeaver


    I said "your" referring directly to the poster. He's living in his own, non-commercial home and renting out a room. No CGT due.


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    #8
    Fian
    Registered Users Posts: 2,188 ✭✭✭Fian


    EagererBeaver wrote: »
    I said "your" referring directly to the poster. He's living in his own, non-commercial home and renting out a room. No CGT due.

    The thing is revenue have decided airbnb is a commercial activity - hence not eligible for rent a room relief. If there is a commercial activity being conducted from the home it is not a "private" principal residence. So if for example I live in a premesis that is also a corner shop I am not going to get full CGT relief when i sell it.

    Like i said it seems very unlikely that a few weeks Air bnb would displace the PPR relief, but it is not absolutely black and white (in a technical sense more than in a likelihood sense.)

    Most likely they would take the pragmatic view that 3 weeks airbnb is not really a commercial activity sufficient to displace PPR relief, whereas year round might be.

    If a person does run air bnb continuously from their home round thad potentially impact on PPR relief.


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    #9
    netflix2018
    Registered Users Posts: 12 ✭netflix2018


    Thanks very much for your replies.


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