CGT on property rental?

Tartopher

Hi there,

I have to move abroad for a year for professional reasons.

I will be renting out my house here to cover the mortgage (1400e pm). Will I have to pay CGT on the house should I see it down the line due to having rented it out?

Many thanks,

T

SureYWouldntYa

When selling the house, the principal private residence relief will be applied based on the years you spent in the house.

If you lived in the house for 9 out of the 10 years you owned it, then you would get 9/10ths relief on the gain. Eg, bought for 200k sold for 300k, gain of 100k. 100k * 9/10 = 90k relief, 10k chargeable gain.

daithi7

https://www.boards.ie/discussion/comment/118494382#Comment_118494382

Does anyone know if this cgt relief is based on a market valuation or a simple pro rata basis?

E.g. if the Op sold this house in a year, after say living in it for 9 years & renting it out for 1, but say it had a market valuation now by an estate agent stating it was more valuable today than when say they finally sold the house in a year's time, would there be any CGT due?

Or would they owe 1/10th of the overall increase be liable to cgt??

SureYWouldntYa

https://www.boards.ie/discussion/comment/118494739#Comment_118494739

It's pro rata based on years, nothing to do with the market valuation.

The CGT would be based on the price that was actually achieved for the house, and then the relief would be adjusted based on the time rented out, whatever that turns out to be

Tartopher

https://www.boards.ie/discussion/comment/118494382#Comment_118494382

Brilliant! Thanks a million for explaining this

Will Yam

https://www.boards.ie/discussion/comment/118494739#Comment_118494739

It’s not quite as simple as has been portrayed. If you are abroad for work, every year you are abroad is deemed to be an occupying year. And also, the last year of ownership is also deemed to be an occupancy year regardless.

so, for example, if you bought 10 years ago for 200k, lived in it for 2 years, worked abroad for 8 years your years of occupation are deemed as occupied. So if you sold it for 400k, the gain is 200k. But all years are deemed occupied and therefore there is no CGT.

Allinall

https://www.boards.ie/discussion/comment/118523027#Comment_118523027

This doesn’t apply if the property is rented, which is applicable in the OPs case.

CGT would apply.