Olivia Mitchell (Dublin South, Fine Gael)
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Question 204: To ask the Minister for Finance his plans on extending the 12 month period of grace during which a person is exempt from capital gains tax on the former family home when a new family home has been purchased in view of the fact that families are currently facing difficulties disposing of homes within that 12 month timeframe; his further plans on allowing a two year period of grace; and if he will make a statement on the matter. [20748/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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A gain accruing to an individual on the disposal of an interest in a private residence and grounds of up to one acre, which has been occupied by him/her throughout the period of ownership as his/her only or main residence, is fully relieved from Capital Gains Tax (CGT). Certain periods of absence are treated as periods of occupation for the purposes of the relief. For example, the last twelve months of ownership is counted as a period of occupation, which can facilitate an individual who has purchased another private residence and is in the process of selling the previous residence.

Where an individual occupies a property as his/her principal private residence for part of the period of ownership, any gain made on the disposal of the premises is apportioned and the portion related to periods of occupation or deemed occupation is relieved from CGT. For example, if an individual occupied a private residence for twenty years, moved to a new home and the old home was not sold for two years, the full period of occupation and the last twelve months of ownership are relieved from CGT and only 1/22 of any gain made on the disposal of the premises is taxable.

This is already a generous relief and I have no plans at this time to make changes in line with the Deputy's suggestion.