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The Irish Times - Thursday - Property - - Advice -

Q AThere’s work go­ing on at the end of our street, and we’ve just been told it’s for a pub­lic toi­let. This is news to ev­ery­one on the road. Is there any­thing we can do to stop it? It is most likely that the de­vel­op­ment is be­ing un­der­taken by your lo­cal au­thor­ity. Such works would gen­er­ally be to im­prove the amenity of an area or im­prove busi­ness or tourism po­ten­tial.

Most de­vel­op­ments by a lo­cal au­thor­ity it­self are sub­ject to a pub­lic con­sul­ta­tion process as set out in the Plan­ning and De­vel­op­ment Reg­u­la­tions, 2001 (as amended). This pro­ce­dure re­quires that pub­lic no­tice of the pro­posed de­vel­op­ment be given (in­clud­ing site no­tice be erected on the site of the pro­posed works). A pe­riod of ap­prox­i­mately eight weeks is al­lowed for pub­lic com­ment on such de­vel­op­ment pro­pos­als. It is pos­si­ble that the pub­lic toi­let pro­posal may have been in­cluded in a larger de­vel­op­ment pro­posal for the area – for ex­am­ple to in­clude pub­lic realm im­prove­ments in your neigh­bour­hood.

Fol­low­ing the ex­pi­ra­tion of the pub­lic con­sul­ta­tion process, a re­port will be pre­sented to mem­bers of the coun­cil (gen­er­ally a lo­cal mu­nic­i­pal dis­trict com­mit­tee) and will in­clude de­tails of any sub­mis­sions or ob­ser­va­tions re­ceived from any pre­scribed au­thor­i­ties and/or the gen­eral pub­lic. The re­port will in­clude a sum­mary of the points made in sub­mis­sions or ob­ser­va­tions and the coun­cil’s re­sponse. The coun­cil­lors will con­sider this re­port and agree to the pro­posal as orig­i­nally planned, or with mod­i­fi­ca­tions (of­ten to ad­dress mat­ters raised in sub­mis­sions).

I would sug­gest that you con­tact your lo­cal au­thor­ity as they will be happy to ad­vise you re­gard­ing the statu­tory/non-statu­tory pro­ce­dure un­der­taken in this case. De­tails of th­ese de­vel­op­ments can also be ac­cessed on most lo­cal au­thor­ity web­sites (Part 8 de­vel­op­ment). An­drew O’Gor­man is a char­tered build­ing sur­veyor and mem­ber of the So­ci­ety of Char­tered Sur­vey­ors Ire­land, scsi.ie

QWe are think­ing of rent­ing out our fam­ily home for an in­def­i­nite pe­riod as we are re­tired and wish to spend more time liv­ing in a warmer cli­mate.

Our plan is to use an apart­ment that we cur­rently have rented as our Ir­ish base as we come back and forth to visit fam­ily and friends through­out the year. This prop­erty is cur­rently val­ued at ¤320,000 and was orig­i­nally bought for ¤420,000.

We are aware that any rental in­come we re­ceive from the fam­ily home is sub­ject to tax. Could you please tell us: 1. What would be the po­si­tion in re­la­tion to Cap­i­tal Gains Tax (CGT) on the fam­ily home if we de­cided to sell it in say, five years’ time? The prop­erty was orig­i­nally bought in 2000 for ¤500,000 and the

A pub­lic toi­let pro­posal may have been part of a plan to im­prove the amenity of an area or im­prove busi­ness or tourism po­ten­tial. cur­rent value is about ¤950,000. 2. If we de­cided to move back into the fam­ily home af­ter a couple of years of rent­ing it, how long would we have to live there be­fore we could sell it as the fam­ily home and in­cur no CGT?

AA li­a­bil­ity to Cap­i­tal Gains Tax (CGT) arises upon the sale of an as­set when the pro­ceeds (less in­ci­den­tal costs of sale) are greater than the orig­i­nal pur­chase price (plus pur­chase costs and ad­justed for in­fla­tion). Based on the as­sump­tion that the value of your house in five years’ time ex­ceeds the cost, a li­a­bil­ity to CGT will arise on the sale.

Prin­ci­pal Pri­vate Res­i­dence (PPR) re­lief ap­plies to the sale of an in­di­vid­ual’s only or main res­i­dence. It is a ben­e­fi­cial re­lief that can re­duce sig­nif­i­cantly an in­di­vid­ual’s li­a­bil­ity to CGT. An in­di­vid­ual’s house and land of up to one acre may be ex­empt from CGT if the in­di­vid­ual has used the house as their PPR through­out their own­er­ship.

If you sell the house in five years’ time and do not re­side in it dur­ing the five-year pe­riod, par­tial re­lief may be avail­able. PPR re­lief is cal­cu­lated on a pro-rata ba­sis based on a com­par­i­son of the pe­riod of oc­cu­pa­tion of the premises as a PPR and the to­tal pe­riod of own­er­ship. As­sum­ing a gain arises on the dis­posal of the house, you would be en­ti­tled to PPR re­lief only for the pe­riod of ac­tual oc­cu­pa­tion by you as a PPR, ie 2000 to mid-2017. Any pe­riod fol­low­ing this will be deemed to be a pe­riod of non-oc­cu­pa­tion, ex­clud­ing the fi­nal 12 months of own­er­ship which are deemed pe­ri­ods of oc­cu­pa­tion for the pur­poses of the PPR ex­emp­tion.

An in­di­vid­ual can­not have more than one qual­i­fy­ing PPR, for the pur­pose of the re­lief. We un­der­stand that the fam­ily home is not your only res­i­den­tial prop­erty.

Send your queries to prop­er­tyques­tions@irish­times.com

or to Prop­erty Clinic, The Ir­ish Times, 24-28 Tara Street, Dublin 2. This col­umn is a read­ers’ ser­vice. The con­tent of the Prop­erty Clinic is pro­vided for gen­eral in­for­ma­tion only. It is not in­tended as ad­vice on which read­ers should rely. Pro­fes­sional or spe­cial­ist ad­vice should be ob­tained be­fore per­sons take or re­frain from any ac­tion on the ba­sis of the con­tent. The Ir­ish Times and its con­trib­u­tors will not be li­able for any loss or da­m­age aris­ing from re­liance on any con­tent. Where an in­di­vid­ual has more than one res­i­den­tial prop­erty, a pro­ce­dure should be fol­lowed whereby Rev­enue is no­ti­fied in writ­ing of which house has been elected as the main PPR. If you have not al­ready done so, we would rec­om­mend that this elec­tion is made, as in its ab­sence Rev­enue will de­ter­mine which prop­erty qual­i­fies as a PPR.

You should also be en­ti­tled to the an­nual ex­emp­tion of ¤1,270. If you jointly hold own­er­ship with your spouse, you are both en­ti­tled to this ex­emp­tion.

Your tax res­i­dence po­si­tion is likely to change, should you spend more time liv­ing abroad. How­ever this will not im­pact your charge to CGT as the prop­erty is an Ir­ish sit­u­ate as­set.

To an­swer your sec­ond query, if you do not oc­cupy the PPR through­out the en­tire pe­riod of own­er­ship, the prop­erty will not be fully ex­empt from CGT, re­gard­less of the pe­riod spent re­sid­ing in the prop­erty fol­low­ing the pe­riod of non-oc­cu­pa­tion.

We would rec­om­mend you con­tact a tax ad­viser if you de­cide to rent or sell your fam­ily home. They can cal­cu­late your li­a­bil­ity and ad­vise you of your tax obli­ga­tions.

in‘ An di­vid­ual’s house and land of up to one acre may be ex­empt from CGT if the in­di­vid­ual has used the house as their prin­ci­pal pri­vate res­i­dence

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

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