I rent out my home a few weeks a year. Will I have to pay CGT when I sell?

Your property queries answered

CGT liability when I rent out my home for a few weeks

CGT liability when I rent out my home for a few weeks

 

I have rented out my home for a few weeks a year over the past three years. I have paid tax on the rental income but want to know if I would have to pay capital gains tax (CGT) if I ever sell my home? In those weeks, it has always remained as my principal home while I travelled. If I stop renting out the property for the next few years, will that make any difference?

A gain arising on the disposal of an asset is chargeable to Capital Gains Tax (CGT).

Principal Private Residence (PPR) relief applies to the sale of an individual’s only or main residence and land of up to one acre. It is calculated on a pro rata basis on a comparison of the period of occupation of the premises as a PPR and the total period of ownership. An individual’s PPR is exempt from CGT if the individual has used the house as their PPR throughout the period of ownership.

There are periods in which owners will be deemed to have occupied their property while not residing in the house. These periods include time spent working abroad and employer-required absences in Ireland. The following conditions apply:

– The individual must have lived in the PPR both before and after the period of absence;

– The individual had no other house that qualified as a PPR during that period;

– In the case of employer-required absences within Ireland, the period of non-occupation cannot exceed in aggregate four years;

– In the case of employer-required absences within Ireland, the period of non-occupation was due to the location of his/her work or conditions imposed by the individual’s employer.

The final 12 months of ownership are also deemed periods of occupation for the purposes of the PPR exemption.

As you have not occupied the property as your PPR for a few weeks a year over the past three years, part of the gain will always be chargeable to CGT, unless the scenarios outlined above apply to you. If you stop renting the property for the next few years, it will not change this position.

You should also be entitled to the annual exemption of €1,270.

Niamh Horgan, tax manager, RSM Ireland, rsm.global/ireland

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
GO BACK
Error Image
The account details entered are not currently associated with an Irish Times subscription. Please subscribe to sign in to comment.
Comment Sign In

Forgot password?
The Irish Times Logo
Thank you
You should receive instructions for resetting your password. When you have reset your password, you can Sign In.
The Irish Times Logo
Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.
Screen Name Selection

Hello

Please choose a screen name. This name will appear beside any comments you post. Your screen name should follow the standards set out in our community standards.

The Irish Times Logo
Commenting on The Irish Times has changed. To comment you must now be an Irish Times subscriber.
SUBSCRIBE
Forgot Password
Please enter your email address so we can send you a link to reset your password.

Sign In

Your Comments
We reserve the right to remove any content at any time from this Community, including without limitation if it violates the Community Standards. We ask that you report content that you in good faith believe violates the above rules by clicking the Flag link next to the offending comment or by filling out this form. New comments are only accepted for 3 days from the date of publication.