Real Estate Alliance

Selling Capital Gains Tax

Capital Gains Tax

What is chargeable under Capital Gains Tax?

Capital Gains Tax (CGT) is chargeable on gains arising on the disposal of assets, other than that part of a gain which arose in the period prior to 6 April 1974. Any form of property (other than Irish currency) including an interest in property (as, for example, a lease) is an asset for CGT purposes.

The main Exemptions and Reliefs The first €1,270 of net gains, i.e., - gains after allowable prior year and current year capital losses, by an individual in a tax year is exempt. In the case of married couples this exemption is available to each spouse but is not transferable.

A gain on the disposal of a principal private residence, including grounds of up to one acre is exempt, provided the house had been occupied by the individual as his/her only or main residence during the individual's period of ownership.

This exemption is restricted where the house was part let or part used for business or the individual did not reside there for long periods (with the exception of the Rent-a-Room Scheme introduced in Finance Act 2001) or where the house or gardens are sold for development purposes.

In budget 2009 the standard rate of capital gains tax is being increased from 20% to 22%.

Also from Budget 2009 a charge of €200 on all non-principal residences will come into effect in 2009. It will be payable by the owners of private rented accommodation, holiday homess and other non-principal residences but will not be applied to new dwellings as yet unsold.