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Capital gains tax

  • 15-04-2023 12:50pm
    #1
    mistymarmar
    Registered Users, Registered Users 2 Posts: 5 ✭


    I have only have one house I rented it out in 2017 for a year and moved back home to family. I have rented it out last year for six months as I went abroad. My question is if I sold my house will I have to pay capital gains on it. Or if I sell it to buy another house do I have to pay capital gains even though I will be using the money to buy a more expensive house



Comments

  • #2
    relax carry on
    Registered Users, Registered Users 2 Posts: 4,113 ✭✭✭relax carry on


    https://www.boards.ie/discussion/2058292490/capital-gains-tax

    Buying another property has nothing to do with any CGT due on another.

    CGT is due on any gain from your original purchase.

    You may be able to claim PPR relief if it was ever your PPR.

    https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/principal-private-residence-ppr-relief.aspx




  • #3
    dennyk
    Registered Users, Registered Users 2 Posts: 1,784 ✭✭✭dennyk


    If you ever lived in the house as your primary residence, you'll be eligible for PPR relief proportional to the time it was your PPR. If it was your PPR at any time, then the property will also be considered your PPR for the last 12 months before it is sold, even if you didn't live in the property and were renting it out during those 12 months. So if you owned the property for ten years in total and lived in it for most of that time, but rented it out for one year back in 2017, then moved back into it and then rented it out again less than 12 months before selling it, you'd be eligible for PPR relief on 9/10ths of the gain, meaning you'd only have to pay CGT on 10% of that gain. If you bought the place for €200k and sold it for €400k, you'd pay CGT on €20k, so you'd owe about €6600 (or a little less if you had no other capital gains that year, since your gain would also be reduced by your €1270 personal exemption...).

    What you do with the money you receive for the sale is irrelevant when it comes to CGT liability. It's the PPR relief that prevents homeowners from having to pay CGT when "trading up" and selling to buy a new house. If there is any CGT liability because you can't claim the full PPR relief, it will be the same whether you're buying a new house or putting your gains in the bank or spending it all on hookers and blow.



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