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cgt upgrading or downgrading

  • 08-03-2021 10:06am
    #1
    beaufoy
    Registered Users, Registered Users 2 Posts: 325 ✭✭


    If a LL sells a property he is renting out and uses the money to buy a larger property does he have to pay cgt on the sale of the first property.
    If a LL sells his first property and buys a smaller property in order to release some funds does he get let off for some of his CGT liability


Comments

  • #2
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    beaufoy wrote: »
    If a LL sells a property he is renting out and uses the money to buy a larger property does he have to pay cgt on the sale of the first property.
    If a LL sells his first property and buys a smaller property in order to release some funds does he get let off for some of his CGT liability

    It doesn't matter what you do with the proceeds of a property sale.

    If you make a gain when you sell (calculated in general as sale price - purchase price - costs on purchase & sale - enhancement expenditure), then you will have a CGT bill.


  • #3
    ted1
    Registered Users, Registered Users 2 Posts: 23,899 ✭✭✭✭ted1


    beaufoy wrote: »
    If a LL sells a property he is renting out and uses the money to buy a larger property does he have to pay cgt on the sale of the first property.
    If a LL sells his first property and buys a smaller property in order to release some funds does he get let off for some of his CGT liability

    Why would you think they could avoid CGT?
    As soon as the gain is made it’s taxable


  • #4
    Ray Palmer
    Registered Users, Registered Users 2 Posts: 8,513 ✭✭✭Ray Palmer


    ted1 wrote: »
    Why would you think they could avoid CGT?
    As soon as the gain is made it’s taxable

    In fairness other countries allow you do this. You have time to reinvest your money back into property and pay CGT if you sell that property.

    It makes a lot of sense if you want to keep landlords in the business of providing accommodation. In Ireland there are lots of reason not to keep a property rented and CGT is one of them.


  • #5
    kippy
    Registered Users, Registered Users 2 Posts: 18,984 ✭✭✭✭kippy


    Ray Palmer wrote: »
    In fairness other countries allow you do this. You have time to reinvest your money back into property and pay CGT if you sell that property.

    It makes a lot of sense if you want to keep landlords in the business of providing accommodation. In Ireland there are lots of reason not to keep a property rented and CGT is one of them.

    Well, surely that depends on timing and how you look at it?


  • #6
    DubCount
    Registered Users, Registered Users 2 Posts: 1,094 ✭✭✭DubCount


    There used to be something called "rollover relief" that allowed you to defer a CGT liability by buying another asset, but this was done away with years ago (around 2002 I think). Now, if you sell and realise a gain, you pay CGT, regardless of what you spend the proceeds on.


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