Q: Is the sale of a family home always exempt of CGT? Is there a threshold formula to determine whether there has been a lot of profit made on the sale of the house?A: Each case must depend on its own entire facts; however, in general terms, full or partial relief from capital gains tax (CGT) is available where an individual disposes of his or her principal private residence (PPR) including land, up to one acre, around the house. CGT may, however, apply where an individual has not resided in the house for a sufficient period of time prior to its sale for it to be regarded as his or her residence. In addition, if an individual self-builds a number of houses and sells them, that individual may be treated as carrying on a trade and would be liable to income tax on the profit from the sales. In order to qualify for full relief, the owner must occupy the property as his or her residence for the full period of ownership. Where the property is not so occupied during the whole period of ownership, only the proportion of the gain applicable to the period of occupation is exempt. Certain periods of absence during which an individual was prevented from residing in his or her property are treated as periods of occupation if, both before and after those periods, the property was occupied by the individual as his or her only or main residence. These are:
- Any period throughout which the individual worked in an employment or office all the duties of which were performed outside the State, or
- Any period, not exceeding four years, or any periods which together do not exceed four years, throughout which the individual had to reside elsewhere due to his or her place of work or a condition of employment.
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