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Capital Gains Tax for selling apartment to pay off mortgage for home

  • 05-02-2019 6:05pm
    #1
    Registered Users Posts: 10 sentosa123


    hi,

    We are living abroad and bought small apartment three years ago and rented it out since. Now we are planning to move back to Dublin and last summer we bought a family home with a huge mortgage on. Currently the family home is on short rent until we move back which will be this coming summer. My husband is thinking of selling the apartment to pay off the mortgage on the family home. In this case, are we still liable to pay capital gains tax on the apartment sale? the answer would be probably YES I suspect. but just in case, there is a tiny little hope we can have some kind of reduction etc??? please let me know.


Comments

  • Registered Users Posts: 7,494 ✭✭✭ BrokenArrows


    sentosa123 wrote: »
    hi,

    We are living abroad and bought small apartment three years ago and rented it out since. Now we are planning to move back to Dublin and last summer we bought a family home with a huge mortgage on. Currently the family home is on short rent until we move back which will be this coming summer. My husband is thinking of selling the apartment to pay off the mortgage on the family home. In this case, are we still liable to pay capital gains tax on the apartment sale? the answer would be probably YES I suspect. but just in case, there is a tiny little hope we can have some kind of reduction etc??? please let me know.

    You will need to consult for tax advice for the country you bought the apartment you want to sell in and the country you live in.

    You owe tax in the country of your residence.


  • Registered Users Posts: 10 sentosa123


    need to clarify my post! We are living abroad n my Irish husband bought small apartment in Dublin three years ago. and also we just bought family home in Dublin as we are moving back to Dublin this summer. and plan is to sell the small apartment to pay off some of our mortgage on the family home we bought. Any way to deduct or escape from the capital gains tax on the sale of our small apartment?


  • Closed Accounts Posts: 4,431 ✭✭✭ Mortelaro


    Live in the apartment for a few years first and rent the house might make more financial sense,then sell the apartment tax free as your principal private residence and move into the house,the few years renting it would probably cover the monthly on your mortgage for it?

    https://www.revenue.ie/en/property/selling-a-house/index.aspx


  • Registered Users Posts: 1,623 ✭✭✭ Baby01032012


    jesus Christ...the above post is why you should not ask for tax advice on the internet

    OP you will be subject to capital gains tax on any gain on the apartment. If you lived in the apartment for any amount of time as your principle residence then this portion of time of ownership will be exempt, however it seems that you haven't lived in the apartment at all so you will be subject to CGT on all of the gain.


  • Closed Accounts Posts: 4,431 ✭✭✭ Mortelaro


    Did you see the question mark at all in my post?
    The OP has I gather never lived in either property and is returning home from abroad so can either property become their principal private residence when they return home or not is the question they should be asking their tax advisor yes?
    Obviously I'm asking if the apartment is what they want to sell and they can live in it for 2 years or more before selling then do the maths on that ?


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  • Registered Users Posts: 10 sentosa123


    thank you all. i will convey the question to a tax man.


  • Registered Users Posts: 5,228 ✭✭✭ The J Stands for Jay


    Mortelaro wrote: »
    Did you see the question mark at all in my post?
    The OP has I gather never lived in either property and is returning home from abroad so can either property become their principal private residence when they return home or not is the question they should be asking their tax advisor yes?
    Obviously I'm asking if the apartment is what they want to sell and they can live in it for 2 years or more before selling then do the maths on that ?

    They'll still have to pay CGT on the apartment. They would only save a little:
    CGT = 33% X gain X time not lived in / total time owned


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