CGT on an Irish residential property after PPR relief and the annual exemption.
CGT owed
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Total gain
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PPR relief
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Taxable gain
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Net after CGT
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Your breakdown
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How PPR relief shelters your home from CGT
When you sell your own home in Ireland, Principal Private Residence relief normally wipes out the entire gain from CGT, because you lived there for the whole period of ownership. The relief becomes a calculation only when you sell a property that was your PPR for some years but not all. This happens when a property is first lived in and then let, or when someone inherits a property they never occupied. The taxable portion is simply the gain multiplied by the fraction of ownership years that were not PPR years, with the final 12 months of ownership always counting as PPR regardless of actual occupation.
A common situation is the accidental landlord, someone who moved out, started renting the old home, and eventually sells. If they owned for eight years and lived there for four, half the gain is sheltered and half is taxable at 33%, subject to the 1,270 euro annual exemption. This calculator works through that arithmetic so you can see the CGT before calling a solicitor.
A worked example: eight years owned, four as PPR
Take a property bought for 250,000 euro and sold for 420,000 euro. The total gain is 170,000 euro. The owner lived there for four years out of eight, so the PPR fraction is 4/8, which is 50 percent. PPR relief of 85,000 euro comes off, leaving a chargeable gain of 85,000 euro. After the 1,270 euro annual exemption the taxable gain is 83,730 euro. CGT at 33% is 27,631 euro. The proceeds after CGT are 392,369 euro, making the effective tax rate on the total gain about 16 percent, much less than the headline 33% because of the PPR shelter on the occupied half.
Costs that reduce the gain
Your allowable cost is not just the purchase price. You can add stamp duty paid on acquisition, solicitor fees at purchase and at sale, estate agent commission, surveyor fees, and the full cost of capital improvements such as extensions, new bathrooms, or a converted attic. Running repairs and maintenance do not count, and mortgage interest is not allowable for CGT purposes on a main home. Keep invoices and receipts for improvements made during ownership, because they directly reduce the taxable gain, and Revenue will ask for evidence if the figures are large.