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Should I sell my existing home

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  • 13-06-2024 1:02am
    #1
    Registered Users Posts: 976 ✭✭✭


    Seeking advise (the plan is to have two houses, one for main residence and other to rent) :

    -> bought first home in 2014 (for Eur 220K)
    -> payed off mortgage by 2019. Basically only I was working and wanted to finish off the debt asap.
    -> Put deposit for a second property last month. Family has got bigger and existing house cannot be extended etc., so have been searching for a long time now. Total Eur 600K (mind you the same house was Eur 470-500K max couple of years back).
    -> Now if I sell the existing property, I should net atleast 150K more.
    As per 
    , the CGT comes to atleast Eur 30K

    Mortgage approved and all, so no worry there.

    I know I am in a very lucky position.
    Should I sell off the existing property and then but another house.
    Or should I give the present house for rent? I have heard that if you sell your initial property within first 1 year of buying the second one, then there are no tax implication. https://www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/property-acquired-between-7-December-2011-and-31-December-2014.aspx



Comments

  • Registered Users Posts: 13,383 ✭✭✭✭Geuze


    If you lived in the first house as your PPR, there is no CGT on any gain made on the sale.



  • Registered Users Posts: 1,051 ✭✭✭JVince


    I presume when you day "payed" you mean "paid".

    No CGT on principle private residence. But once you start renting it, CGT starts coming int the calaculation after year 1.

    EG, (dates to make calculation simple) Bought sept 2015 200k, rent from sept 2024, sell sept 2035.

    Ownership 20 years. PPR 9 years, grace period 1 year, rental cgt period 10 years. CGT = 33% on 50% of the uplift from 2015.

    So if sold for 520k in 2035 and allowing 20k in sales costs, the "profit" would be 300k, 50% is cgt liable, so cgt would be 50k (33% of 150k)

    But in the meantime, unless the property is in a pension fund you will be paying about 50% of the net rental income in tax. Figures are unlikely to add up.



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