Selling a 2nd Property

Questions about selling property
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ApusApus
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Joined: 20 Feb 2019 18:57

Selling a 2nd Property

Post by ApusApus » 20 Feb 2019 19:10

Hi Nigel

I am looking for clarification on the sale of a 2nd property in Cyprus.

My wife owns 2 properties here, one we live in and one we rent out, both inherited when her mother passed away some time ago. We are considering selling the 2nd property, am I correct in assuming that if we do we will be liable for Capital Gains Tax at 20% of the total sale price of that property or is there more to it than that?

Thanks


Shane



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Re: Selling a 2nd Property

Post by Nigel Howarth » 20 Feb 2019 19:49

Hi Shane and welcome to the property forum.

You will have to pay CGT on the sale of the second property (which I assume has not been your main residence) - but not 20% on the total sales price.

CGT will be calculated at the Sale Price minus the property's 1980 value (adjusted for inflation) at the rate of 20%. To calculate the inflation, the consumer price index (CPI) is used for the month preceding the disposal of the property and the month of acquisition, which in your wife's case will be January 1980

Plus your wife will have a personal allowance of €17,086.01 which can be deducted from the calculation above.

There are a number of allowable expenses that she can use - Estate Agent's fees/commission (providing they are registered) and other allowable expenses including stamp duty, immovable property tax, and additions or improvements to the property since your wife inherited it and before she sells.

She'd best use an accountant to work out her CGT liability - it's a bit of a black art!

Regards,


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Pantheman
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Re: Selling a 2nd Property

Post by Pantheman » 21 Feb 2019 10:12

Nigel Howarth wrote:
20 Feb 2019 19:49
CGT will be calculated at the Sale Price minus the property's 1980 value (adjusted for inflation) at the rate of 20%. To calculate the inflation, the consumer price index (CPI) is used for the month preceding the disposal of the property and the month of acquisition, which in your wife's case will be January 1980
Unless the mother bought or built the property and then that cost would be taken. He didn't mention when she received the property!


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ApusApus
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Re: Selling a 2nd Property

Post by ApusApus » 21 Feb 2019 16:57

Hi Pantheman

My wife's mother owned half the property which was bought around 2005, the other half was her husband's. When her husband passed away, his share was transferred to her. When my wife's mother passed away in 2010, the whole property was transferred to my wife. Probate and Title Deeds were concluded in 2016.

Does this affect the position?


Shane



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Re: Selling a 2nd Property

Post by Pantheman » 22 Feb 2019 10:52

ApusApus wrote:
21 Feb 2019 16:57
Hi Pantheman

My wife's mother owned half the property which was bought around 2005, the other half was her husband's. When her husband passed away, his share was transferred to her. When my wife's mother passed away in 2010, the whole property was transferred to my wife. Probate and Title Deeds were concluded in 2016.

Does this affect the position?


Shane
Yes, because they would consider the purchase costs of the property as a deduction. Everything else Nigel has mentioned still holds and you will be taxed at 20% of the remainder after all allowances have been deducted.

You cannot escape this, so no need to worry about it, if you are going to sell, then you have to pay the tax.

Even if you sell you permanent residence you still pay CGT!

Good luck.


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