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selling a 2nd property
carina62
Posts: 48 Forumite
Would I have to pay tax on any equity I may make on selling my 2nd property which I currently rent out? thanks
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Depends on how much capital gain you make on selling it and if it was ever your principal private residence.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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well at a guess, i would stand to make about 20K in equity so would i have to pay anything to the taxman and how would it be worked out? thanks0
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Read the link you've been given, but basically you pay tax at your highest rate on any gain above the CGT allowance, which is £11000 this year. So if you're a 20% tax payer and you have no reliefs to claim then you'd be looking at 20% of £9000, so £1800 in total.0
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How do you mean no reliefs to claim? i will read the link in detail later thanks0
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CGT liability on the sale of rental property is almost a weekly question on here
here are earlier examples which will explain all - if you read them
https://forums.moneysavingexpert.com/discussion/5046487
https://forums.moneysavingexpert.com/discussion/5035228
https://forums.moneysavingexpert.com/discussion/50339540 -
well at a guess, i would stand to make about 20K in equity so would i have to pay anything to the taxman and how would it be worked out? thanks
Equity isn't the same as Capital Gains... What's relevant is the difference between how much you sell the house for and how much you paid for it in the first place (or the probate valuation if you inherited it).0 -
Has it always been a rental property or did you ever live in it?
If you lived in it, when did you move out.
What did you pay for it (including stamp duty, mortgage fees, survey legal fees etc).
What will it sell for (adjust this for legal fees, estate agents, any mortgage related fees).
The difference between the two is "profit", this will be adjusted further if you lived in the property.
You then pay tax on the profit after adjusting for capital gains allowances.0 -
It was my parents property which i inherited and i used to live there until i got married (age 21) but when my father passed away 7 years ago i put it up on the rental market. The property is a semi detached terraced house and is approx priced at around 100K which was the price 7 years ago. If i decide to sell it in the next year or so, i have estimated that i would make about £20,000 on it (approx) and i just wondered if i have to pay the taxman any money. Thanks for all your replies by the way.0
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It was my parents property which i inherited and i used to live there until i got married (age 21) but when my father passed away 7 years ago i put it up on the rental market. The property is a semi detached terraced house and is approx priced at around 100K which was the price 7 years ago. If i decide to sell it in the next year or so, i have estimated that i would make about £20,000 on it (approx) and i just wondered if i have to pay the taxman any money. Thanks for all your replies by the way.
the gain will be the difference between the probate value and the selling price (less selling costs)0
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