Got a query?
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 firstname.lastname@example.org
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