Would I be better leaving my property empty?

Seve OB

JimmyMW wrote: »

Id advise re-reading the tread

snap
the girl is moving out
it is no longer her PPR

JimmyMW

Seve OB wrote: »

snap
the girl is moving out
it is no longer her PPR

Yes but it was up until now, therefore the PPR exemption will be taken into account in the CGT calculation liability

JimmyMW

Seve OB wrote: »

snap
the girl is moving out
it is no longer her PPR

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/cgt-exemptions.aspx

Carlos Orange

tvjunki wrote: »

Not worth renting it out for a year or so.

Even if it was there isn't a guarantee that you could sell it for market value in a year. Who knows what the rules will be then.

April 73

If it’s in a prime city centre location why not consider a corporate let?
Not every Landlord has to deal with troublesome tenants.

Seve OB

JimmyMW wrote: »

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/cgt-exemptions.aspx

That answers nothing.

Fact is if a person moves out the property is no longer their PPR.
They have a grace period of 1 year to sell the property and once a sale is made within the year, even on day 365, if there is an appreciation in value, there will be no CGT due.
If they hold onto it for a longer period of time hoping it will increase further in value, it now becomes an investment....... Even if they don't rent it out.
If during the first year they decide to rent it out on day X, it immediately becomes an investment property. When the property is eventually sold on day Y. CGT will be liable on any increase in value between day X and day Y.

Claw Hammer

April 73 wrote: »

If it’s in a prime city centre location why not consider a corporate let?
Not every Landlord has to deal with troublesome tenants.

This has nothing to do with troublesome tenants. It has to do with CGT. Te O/p can make a tax free capital gain of €150K if they sell the house as their PPR. If the house is let whether corporate or not, , unless the property continues to appreciate at the same rate as heretofore, the o/p will become liable o increasing portions of the €150k.

Turkish1

Seve OB wrote: »

That answers nothing.

Fact is if a person moves out the property is no longer their PPR.
They have a grace period of 1 year to sell the property and once a sale is made within the year, even on day 365, if there is an appreciation in value, there will be no CGT due.
If they hold onto it for a longer period of time hoping it will increase further in value, it now becomes an investment....... Even if they don't rent it out.
If during the first year they decide to rent it out on day X, it immediately becomes an investment property. When the property is eventually sold on day Y. CGT will be liable on any increase in value between day X and day Y.

Completely incorrect advice. Other poster is along the right lines - final year of ownership is considered a 'PPR'. Apportionment is time based and nothing to do with value at different points of time. Simple example

House bought 1 Jan 2008. 200k
House sold 1 Jan 2018. 300k

Lived in as PPR for 8 years and rented for 2 years. Final year of ownership considered 'PPR' and therefore CGT exempt.

CGT calc
(A) 100k profit
(B) PPR exempt = 100k /10*9 (8years + last year of ownership) = €90k
(C) Liable to CGT = A - B = 100K - 90K = 10K
(D) CGT = 10k * 33% = 3,300

This excludes annual exemption and potential other reliefs (offsetting against previous losses etc..)

LotharIngum

Its funny. I just posted a thread outlining my thoughts and looking for others input because I am not renting my property again.
Have a look here op and you might find some of the answers I hope to get useful too.

Its not exactly your situation, but it could be similar soon I guess.

https://www.boards.ie/vbulletin/showthread.php?t=2057930174

April 73

Claw Hammer wrote: »

This has nothing to do with troublesome tenants. It has to do with CGT. Te O/p can make a tax free capital gain of €150K if they sell the house as their PPR. If the house is let whether corporate or not, , unless the property continues to appreciate at the same rate as heretofore, the o/p will become liable o increasing portions of the €150k.

OP is talking about letting it for a short period of time. The amount of CGT would be tiny.

4ensic15

April 73 wrote: »

OP is talking about letting it for a short period of time. The amount of CGT would be tiny.

The o/p has only had the apartment for a short time as well so it wouldn't take much to cause CGT to kick in.

Fian

Seve OB wrote: »

Incorrect

You will have to pay CGT on the sale, but it will not be on €150k.

in simple terms
Lets say you bought it for 150k
today it is worth 300k
you rent it tomorrow
you sell it in a year or whenever for 400k

you will be liable to pay CGT on the difference between what it is worth today and what it gets sold for. so that would be €100k taxed at CGT rate, less your allowance.... so on top of rent for the year(ok you pay tax at your marginal rate on that) but you can realise a capital gain..... mind you it could be a loss.....

so you can bank up to 300k whenever you well it with no CGT charge
if you sell it for less than 300k, that will be a loss which you can offset against any other capital gain

It is not cgt on teh increase from when you start renting. If you have it as your pdh for x years and rent for y years you pay CGT on y/x of total increase. You don't get to decide, well most of the increase happened when I was living there and there was very little increase while i was renting it out.

edit just noticed turkish has explained this much better than I have. so what he said.

Seve OB

I apparently stand corrected.

I guess that's why I failed my tax exam