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CGT when property sale price less than valuation.

  • 09-09-2021 12:37pm
    #1
    Bannasidhe
    Registered Users, Registered Users 2 Posts: 19,218 ✭✭✭✭


    Am not directly involved but know both parties in the sale of a property and the cat has been put among the pigeons at the last minute due to advice given to the vendor.


    In short - hse owned by non-Resident vender (no mortgage) occupied by now deceased father was offered to a non-relative of vendor in 2019 for slightly over price paid for it 23 years ago (bought for c105k - to be sold for €120k) for a quick easy sale. Hse at the time would have been worth c160k and need approx 20k investment to bring it up to standard (windows, boiler etc). Purchaser aware this would attract a gift tax liability.

    Between Covid, Employer payment schemes etc, whole thing was delayed and bank valuation of hse is now 250k (this figure will be argued with Revenue). Vendor has been advised he will be liable for CGT on this valuation amount not actual sale price.

    In essence he has been told that rather than CGT on c15K he will be liable for CGT on c140k.

    Can anyone confirm if this is the case?



Comments

  • #2
    Bannasidhe
    Registered Users, Registered Users 2 Posts: 19,218 ✭✭✭✭Bannasidhe


    https://www.boards.ie/discussion/2058208060/cgt-when-property-sale-price-less-than-valuation

    Following some digging it appears that when the property was the sole residence of an incapacitated relative of the owner and was provided rent free a PPR exemption can be claimed.

    This is the situation here so hopefully will apply. The resident passed away late 2019.

    It turns out the accountant giving the advice to the vendor's solicitor was not aware of this and may have assumed it was an investment property.



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