Letter to the Editor

This letter was sent by a reader to our Money Mentor, Margaret Nolan.

Dear Money Mentor,

I own a holiday home near my family farm in Waterford which I bought in the year 2003 for €100,000.

Many years ago this was part of my family’s property but was sold. I have made some renovations to it over the years, costing about €50,000. I wish to sell the holiday home now and would like to know if I will have a capital gains tax liability if I do. It is currently valued at €220,000.

Regards, Mary

Hi Mary,

This holiday home is classified as an investment property so, as such you will be liable to pay capital gains tax (CGT) on any gain. I am assuming you live elsewhere. The revenue allows enhancement expenditure to be off-set against capital gains, once the enhancement is still in place when you sell. Therefore, the gain is €120,000 if you sell the property for €220,000. If all the €50,000 renovation cost is allowable as ‘enhancement’ the capital gain can be reduced to €70,000. You can deduct a personal capital gains tax exemption of €1,270 from any gain, and the balance of €68,730 is taxable at 33%. You should avail of professional tax advice before selling.

Instagram Inspiration

If you like dancing then you’re going to love the @_cairde Insta account. Seven lads in their hoodies and jeans Irish dancing across the country. From the scenic Cliff of Moher to cars driving past them on Salthill Strand, these lads are dancing to the best chart toppers and we have lost hours captivated by their moves. Irish dancing will never be the same again.

Tweet of the Week

Photo of the Week

Machinery man: Two-year-old Tadhg from Co Tipperary browsing the Irish Farmers Journal machinery section.

Number of the Week

35

The number of years of marriage Mairead Lavery will be celebrating with her husband Sean next week.

Quote of the Week

From Karen Brosnan, on corporate governance:

The best boards are those that are inclusive, comprising people from all backgrounds and walks of life and representing a wide variety of views and skills. Good boards are also strongly representative of their ‘consumers’ - the people they serve