Capital Gains Tax relief on property held for 7 years or 4 years
In order to avail of this Capital Gains Tax relief on property, the property has to be held for a minimum of 4 years (reduced from 7 years).
The property must have been acquired by 31 December 2014. See Revenue Guidance eBrief 101/14
In Finance Act 2012 (section 64 inserting section 604A into the Taxes Consolidation Act 1997 as amended (TCA)) a capital gains tax (CGT) relief was introduced for those who purchased property (land and buildings) within a specified period and held onto it for 7 years (reduced to 4 years for disposals after 1 January 2018).
The relief is that no capital gains tax (CGT) is payable on any gain attributed to the first 4 years (up to 7 years available) of ownership on the disposal of the property.
If the property is held for more than 7 years the taxable gain excludes the portion calculated as – total gain * 7 years/total period of ownership.
Conditions to satisfy for CGT relief on property held for 4 years or 7 years
The conditions to avail of this relief are:
• The land or buildings must be situate within Ireland or an EEA State (an EU Member State or Iceland, Lichtenstein or Norway);
• The land or buildings must have been acquired at market value (or at 75% or more of market value if purchased from a relative (as defined in section 10 TCA which includes brother, sister, uncle, aunt, niece, nephew, ancestor or lineal descendant);
• The land or buildings must have been acquired in the period between 7 December 2011 and 31 December 2014;
• The land or buildings must be held by the owner for at least 7 years from the date acquired (reduced to 4 years for disposals on or after 1 January 2018); and
• Any income or profits or gains derived from the land or buildings must be within the charge to Irish income tax or corporation tax.
The material in this article is for general information purposes only and does not constitute legal or taxation advice. Specific legal and taxation advice should be sought before acting. All information and taxation rules are subject to change without notice.
No liability whatsoever is accepted by M. McLoughlin & Co. for any action taken in reliance on the information in this article