What is Private Residence Relief?It is the name given to the tax relief that has been created to ensure that most people will not receive a
bill when they sell their own private residence.Who Qualifies For The Relief?As a general guide line, anyone who has lived in their own home that they have lived in since they owned it, will be eligible for private residence relief.However, there are a few exceptions to the rule, such as:These are just a few of the things that could affect your eligibility for private residence relief. However we highly recommend that you consultant a competent tax professional, since the list above is not exhaustive and the rules and guidelines do change from time to time.Which Types of Properties are Counted?Most homes that can be classed as a ‘dwelling’ can be treated as appropriate for private residence relief. This includes but is not necessarily limited to; a house, flat, apartment, houseboat or a fixed caravan.What if You Made A Financial Loss on The Property?If you are in a situation where you have made a loss when selling the property, unfortunately, at the time of writing, this loss cannot be classed as an allowable loss that you could use to offset any gains you have made elsewhere. What Happens if You No Longer Live There?You may still qualify for the relief even if you not longer live in the property. However, certain criteria would need to be meet, these include:What if You Own More Than One Property? If it is the case that you have more than one property that you live in then you can tell your tax office which one you wish to be treated as you ‘principal residence’ for capital gains tax purposes. A stipulation here is that you do actually have to live in this property – you can’t just nominate the most convenient or cost effective, in terms of saving money on your tax bill.If you have bought a property for the purpose of someone else to live in it then this is classed as an investment and you would not be entitled to the relief and therefore, in normally circumstances, you would have to pay capital gains tax on the property.Further Information Private residence relief can be a complicated tax (can’t they all?) so as mention previously it is highly advisable that you seek the appropriate professional advise especially if you need to consider things like the implications on various variables such as .Further reading and even more of an in-depth explanation can be found by checking out the websites below.This one links straight to a pdf file:
**Nothing on this website should be confused with financial or legal advice. If you need this, or any other type of advice, please seek the help of a competent professional. In addition, because real estate laws change all the time and differ from state to state, and even city to city in the same state, everything in these pages should be considered general marketing advice and ideas. Please see link to full Disclaimer at the bottom of this page.
