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Capital gains tax on property sale after 10 years

45 posts in this topic

 

Actually you are quite right. There is currently no capital gains as I can't sell it. This is the reason I'm thinking of renting it out but I don't want to go to the trouble if it is all going to dissapear at 40% CGT in three years. Might as well cut my losses and drop the price even more to get a sale now (and make a significant loss)

 

Do I understand this right, you would rather sell at a loss ... than wait 3 years, get rental income, and perhaps sell at a profit of which you keep 60%?

 

Let me set you straight, unless you have other gains to offset against that loss then 60% of something + rental income is much much more than 100% of a loss. The only reasons to sell other than hardship would be to offset some other capital gain or if you were of the opinion that house prices will fall further ... which they might well do.

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You are quite right - it does seem a little odd. A bit more info I could haved added but didn't want to overcomplicate. Basically there are other costs which will pop up if I keep it another couple of years rented out - new bathroom and windows etc. This plus the capital gains tax (if I have to pay 40%) will leave me having made almost no profit and if thats the case I could do without the hastle. And thats if the prices go up in 2 years (its not in the best area and I don't think I can afford to wait 5 years to sell) - if they don't my loss will be the same as now plus the extra money I need to spend to do it up for selling - so I'll be even worse off. If however I'm likely to be able to avoid some or all CGT I will certainly be better to hold on and renting is the way forward....

Thanks

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new bathroom and windows etc. This plus the capital gains tax (if I have to pay 40%) will leave me having made almost no profit

 

New expenditure "should" increase your capital cost base and in the case of a profit, reduce your capital gain. This would be the case for rental but for a private residence I'm not sure how that works ... but I'm sure the HMRC will have a hint sheet for that. After all that is what a capital gain is, gain on capital costs. Also, as a rental certain items may become available for depreciation which can also offset capital gains.

 

You also have the costs of selling and then later buying, a good 7%.

 

Your are right though, its not a good market and it could get worse. A smaller loss is better than a bigger one.

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I purchased a property in Berlin in March 2015 and paid 95% of the price but it is not registered until now. 

If I paid the remaining 5% in March 2018 and registered in the same time of the year, would I be considered subject to waive from capital gain tax in March 2025 ? or March 2028 ? 

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On 18/02/2018, 14:46:55, kld said:

I purchased a property in Berlin in March 2015 and paid 95% of the price but it is not registered until now. 

If I paid the remaining 5% in March 2018 and registered in the same time of the year, would I be considered subject to waive from capital gain tax in March 2025 ? or March 2028 ? 

It would when you bought the place, as always, confirm this with your Steuerbrater before selling.

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