Capital Gains Tax

What is Capital Gains Tax?
How Do I Calculate Capital Gains Tax?
- Exemptions from Capital Gains Tax
  - What if I lived in the property for a period of time?
    - What if I bought between 7 December 2011 and 31st December 2014?
  - Selling a rental property?

What is Capital Gains Tax?

If you’re selling a property in Co. Cork, you may have heard about Capital Gains Tax and may be wondering whether or not you’re liable to pay it. As experts in property, our team at DNG GALVIN are on hand to give you all the guidance and information you need.

How Do I Calculate Capital Gains Tax?

If you sell a property that is not your primary residence, for more than you paid for it, you will have a capital gain which is taxable.

To calculate the amount of Capital gains tax you owe, you need to subtract the price you paid for your property including other allowable expenses from its selling price to work out the profit.

The government website has a handy online calculator that you can enter this figure into to determine the amount you need to pay, but there are some considerations to take into account first, since they could affect how much you owe overall. We always recommend you consult a Capital Gains Tax professional who will be able to answer questions relating to your individual circumstances.

Exemptions from Capital Gains Tax

Enhancement costs – any money spent on enhancing (adding value) of the building over the years can be netted against the taxable gain. Furthermore these expenses can be indexed up to todays value and not just the amount you paid at the time of doing the work. General maintenance expenditure is not permissible.

Buying and Selling Costs – When you bought your property you incurred expenses such as legal fees and surveyors fees. When you sell you will incur estate agency fees and legal fees. These expense’s can be netted against your gain. The costs associated with purchasing can be indexed up to present value.

The first €1,270 of taxable gains in a tax year are exempt from CGT. If you are married or in a civil partnership, this exemption is available to each spouse or civil partner but is not transferable.

What if I lived in the property for a period of time?

If you lived in the property for a period of time but also rented the property for a period, the gain that accrued during the period in which you lived in the property is not taxable for CGT purposes. So calculate the full gain and then exclude the percentage of gain that occurred while living in the property.

What if I bought between 7 December 2011 and 31st December 2014?

Currently no CGT will apply to gains on purchases made between 7 December 2011 and 31 December 2014 where the property is held for at least seven years. This includes all EU and EEA located properties. Gains on properties held for longer than seven years will be time apportioned. Finance Act 2017 reduces the required holding period from seven to four years for disposals made on or after 1 January 2018. The aim is to reduce any impact the required seven-year holding period may have on the supply of development land, with the intention of increasing supply so more houses can be built.

Selling a rental property?

If you’re ready to sell a property in Co. Cork whether it’s your primary residence, a buy-to-let property that you own, or a second home, get in touch with us here at DNG GALVIN. We can help you with all your selling needs, and as experts you can count on us to offer you an exceptional level of service. Give us a call today on 023 8844958 or click here

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