WHAT WOULD MY TAX BILL BE IF I SOLD MY AIRBNB FLAT?

Q

I earn around €5,000 a year from renting out a room in my two-bedroom apartment via Airbnb. How much would I have to pay in capital gains tax when I sell the apartment? Would this cancel out my income when I sell? The apartment is worth €250k.

A

The situation on CGT and Airbnb isn’t completely clear. But the Revenue has indicated it will be calculated on a basis similar to B&Bs – the portion of the property let out and length of time it is advertised and available to let will be considered.

Your property probably gained €30k in value last year based on property increases. If a large portion of your home is regarded as ‘to let’, then yes, there will be a sizeable CGT bill when you sell. And this would probably gobble up the income you get from letting it out, such is the extent of property price rises.

Q

We were taken off a tracker mortgage with PTSB about eight or nine years ago for a property we had bought for an investment. We requested to stay on the tracker but we were told, as per our contract, that we couldn’t. We pay interest only. Our worry is that if we make any enquiries we may be forced to pay back the capital, which we couldn’t afford.

A

There is a bit of a scandal going on at the moment about tracker mortgages. If borrowers, including those with buy-to-lets, were given a bum steer by their lender and encouraged onto a dearer mortgage when there was an upcoming cheaper option in their contract then they may be entitled to seek redress. This sometimes happened, for example, at the end of a short-term fixed rate, where borrowers were encouraged to forego their tracker and take up a standard mortgage. Many banks were implicated, including PTSB.

But it’s not quite clear if this the case with your mortgage.

PTSB confirmed that buy-tolets are in a redress scheme it operates for customers. But a spokesman said: ‘The customer doesn’t have to contact anybody... the bank is looking at all the mortgage accounts that at any stage had an entitlement to a tracker mortgage and will identify any that are eligible for redress.

‘The bank’s work in this area is overseen by an independent third party and the Central Bank has its own oversight team which reviews the work again.

‘If you are eligible you will be contacted... if you are not eligible you won’t be contacted.’

PTSB should not penalise you if you contact it about this.

If you are still unhappy with your position and feel you need some legal advice, some solicitors specialise in this area. One of them is Anthony Joyce, who has a guide to the tracker mortgage issue on his site, anthonyjoyce.ie.

Q

I’m keen to arrange to meet a financial adviser to check I’m doing the right things with my savings. I’m convinced that a flat fee is far better than a commission. I wonder if there’s any financial advisor you’d recommend who I could trust to give unbiased advice (based in Dublin)?

A

You’re right to be suspicious of advice that you don’t pay directly for. The chances are that the adviser is paid in commission or wages by the institutions he recommends. The Central Bank strictly regulates this area to try to ensure we get the best advice, but it is still a minefield. Pay a fee and at least you know there’s no incentive for your adviser to steer you towards a particular company, or get you to switch investments when there is no need.