Selling house won in a raffle

el Fenomeno

Not lucky enough to have won one, but I've noticed more and more of these "win a house" raffles usually run by GAA clubs or such.

Ticket prices are generally around €100. Hypothetically if you won a house and wanted to sell it straight away, what are the tax implications?

Would you pay CGT on Sale Value minus €100…? I know in T&C you're actually buying membership to the club's rather than paying to enter the raffle. The raffle is then a free raffle among club members.

satguy

I'm not sure you could afford to sell it with all the CG tax you would owe on it.

It would be more tax efficient to live in it for 7 years, then sell it.

thegolfer

My understanding is that the winnings are from a lottery, which the winnings are tax free. You receive say 250000 free, which is the value of the house.

This 250000 is the value for tax purposes, which if you sell the house is the base cost for capital gains tax.

Any uplift in the value say to 275000, you'd pay cgt on the difference which is 25000, at 33%, then less any personal allowances or losses.

Happy4all

thegolfer wrote: »

My understanding is that the winnings are from a lottery, which the winnings are tax free. You receive say 250000 free, which is the value of the house.

This 250000 is the value for tax purposes, which if you sell the house is the base cost for capital gains tax.

Any uplift in the value say to 275000, you'd pay cgt on the difference which is 25000, at 33%, then less any personal allowances or losses.

The base cost would be €100 versus the sale price.

Does the person own another house. If not, move into it and use as PPR and then sell. No CGT on sale of PPR.

Or if they already have another house, sale that as PPR ..no CGT and move into new house.

gar32

With rent prices the way there are just rent it out. Unless your getting more then €75k a year in income from your job the tax would be at the lower rate. €1000 a month X 12 months - expensive & tax. You could get €8k a year for the foreseeable future.

thegolfer

Happy4all wrote: »

The base cost would be €100 versus the sale price.

Does the person own another house. If not, move into it and use as PPR and then sell. No CGT on sale of PPR.

Or if they already have another house, sale that as PPR ..no CGT and move into new house.

No.

If you won 250000 Cash, it's exempt from income tax so long as the lottery comes within the 1956 gaming and lotteries act.

The market value of the winnings is 250000 cash. Thus this equates to the base cost of the house for cgt purposes on disposal.

Spanish Eyes

I think Happy4all above has it nailed.

Am filing that away in my brain for when I win a house!