Q&A

Your property questions answered

What’s my tax liability if house sells at a loss?

Q Can you claim Capital Gains Tax (loss) on your principal private residence (PPR). If not, can you claim a percentage of CGT (loss) if, for a period of time, it was rented and, for a period of time, it was your PPR?

A The implications of incurring a loss on a sale is something more buyers are going to have to try to figure out when it comes to tax liability. Capital Gains Tax (CGT) is a complicated area and we put your query to Revenue who said that by virtue of Section 546(3), which deals with losses for CGT, the calculation of allowable losses on a disposal of a principal private residence (PPR) is the mirror image of the gains position. If a house were owned for seven years, lived in as a PPR for the first three years and then rented until sale at end of year seven, then four-sevenths of any gain over the whole period would be relieved. (The first three years of occupancy and the last 12 months – a deemed period of occupancy – give four years). But if a gain is not chargeable, then a loss is not allowable. If over the seven years there was a loss, then three-sevenths of the loss would be available for set off against other gains.

Can I claim TRS when I move back in?

Q I have owned my own home for nearly two years and I am thinking of renting it out, as I am leaving the country. I know I will lose my tax relief at source (TRS), but what happens on my return if I move back into it and it again becomes my principal private residence (PPR), can I once again claim TRS until the seven years of ownership are up?

A Your query makes reference to two years but this is likely to span three tax years – 2007, 2008 and 2009. If you leave the house before December 31st, 2009, you will lose the tax relief granted via the TRS system from the date of vacating the property. If and when you resume using the house as your PPR, interest relief through the TRS system can be claimed for four further tax years. When you move out, make sure to contact Revenue – on 1890 463626 – so the relief can be cancelled, and when moving back in contact this number again to restore relief.

Will holidays lengthen planning delay?

Q We applied for an extension and the planners want more information. We will provide this by the end of November – our architect says approval should be granted within four weeks. We have a builder ready to start. How do we factor in the Christmas break when working out the planning timescale?

A Disregard the time between December 24th and January 1st – this extends the planning application process, including time limits relating to the maintenance of site notices and receipt of submissions or observations, by nine days.

Your questions

Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or email propertyquestions@irish-times.ie. This column is a readers’ service and is not intended to replace professional advice.