Interesting article issued in The Irish Times today regarding selling a rental property in negative equity.
A reader asks –
is there any capital gains tax due if
mortgagewas paid off and sold at a loss?
Let’s clarify, there is only Capital Gains Tax (CGT) due if there is a gain on the sale of property, which in this case would be zero. The gain is simply the sale price, less the cost price including other allowable expenses and reliefs. Any outstanding mortgage is irrelevant.
There will be no capital gains tax to pay and you will have a loss that can be offset this year against any gains you may make on the sale of other assets.
This loss can also be carried forward and offset against any future gains.
Regarding VAT, this area depends on a number of factors and each case needs to be reviewed in order to evaluate.
Read more on this article here