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Capital Gains Tax on Property Development

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  • 23-09-2014 5:15pm
    #1
    darby5250
    Registered Users Posts: 19 ✭


    I am currently looking into the idea of buying a small development site to build four new apartments on. I am trying to get an idea on the costs of taking on a project like this (Building, Architect fees, Planning Permission, Council Contribution fees, etc...)

    I know the standard Capital Gains TAX rate is 33% when selling a house or apartment, but as this will be a property development I'm not sure how much Capital Gains TAX I can expect to have to pay upon selling each apartment unit?

    Any constructive feedback posted here or sent to me by PM would be gratefully appreciated.

    Thank You in advance
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    #2
    Victor
    Registered Users Posts: 78,392 ✭✭✭✭Victor


    You would be well advised to engage a solicitor and/or accountant with experience in construction. Depending on the exact format the construction takes, CGT might not apply, e.g. if you proceeded with the construction as a business instead of a capital gain..

    * Building - this will depend on many matters, including the target market you are going for (chrome taps or gold taps?), building shape, number of storeys, site accessibility
    * Architect fees - all professional fees together should come to no more than 15% of construction costs.
    * Planning Permission - a few hundred in fees to the council + part of the design fees.
    * Council Contribution fees - will depend on the individual location - check the council website. There may be secondary contributions to other projects.


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