How To Classify Your Property As Private For Tax Purposes ?

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How To Classify Your Property As Private For Tax Purposes ?


Apartment Listing  

Property relief can be provided for private home owners. It is very important to know who is eligible for the private home owner’s tax and who is not. The general law is that a person who has lived in his own home throughout the time he has owned it and has never rented it out for income is not required to pay the capital gains tax or the CGT when he sells his property.

The tax is covered by the private residence relief. However, as mentioned before the house should not have been completely or partially rented out to anyone as a commercial motive. Even though a person has lived in his own house his entire life until the moment he decided to sell it there are some exceptions which can cause him to disqualify from this benefit.

If a person has a garden that is more than 0.5 hectares which is unused or unoccupied, then it is not qualified for complete tax relief.

A definition of a house is a house alone and if need be a garage. If there are several outer buildings, then the property as a whole may not qualify.

If they have ever used any part of the building for any commercial purpose, this can disqualify them for a tax relief.

Also, if it has been established that the home owner has bought the house entirely for a sale purpose or to benefit from, the difference in selling price and buying price would automatically entail the homeowner paying a tax in the form of capital gains.

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How To Classify Your Property As Private For Tax Purposes ?