Mark Wall (Kildare South, Labour)
Link to this: Individually | In context | Oireachtas source

392. To ask the Minister for Finance if the exemptions for capital gains tax apply to a family carer who moved out of their principle primary residence into the home of the cared-for person for a number of years in order to provide full-time care. [10852/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by the Revenue Commissioners that, in general, Capital Gains Tax (CGT) is chargeable on a gain arising on the disposal of an asset, including a residential property, at the rate of 33%. The first €1,270 of chargeable gains of an individual in any year are exempt from CGT.

Section 604 of the Taxes Consolidation Act, 1997 provides relief from CGT on the disposal of an individual’s principal private residence (PPR), being a dwelling house together with land occupied as its gardens or grounds up to an area (exclusive of the site of the residence) of one acre. If a property was occupied by an individual as his or her PPR for all or part of his or her period of ownership, then full or partial relief from CGT will be available where a chargeable gain arises on the disposal of that property. The last 12 months of ownership of the property by the individual is deemed to be a period of occupation for the purpose of this relief. An individual may only have one PPR at any given time.

As mentioned above, if an individual occupied the property as his or her PPR throughout their period of ownership, full relief is available in respect of any gain which arises on the disposal of the property.

Where the property was occupied by the individual as his or her PPR for part of the period of ownership, only a proportion of the gain on the disposal is exempt. This proportion is the same proportion that the length of the period of owner-occupation (inclusive of the last 12 months of ownership) bears to the length of the period of ownership. The balance of the gain is chargeable to CGT in the normal manner.

By way of example, if an individual both owned and occupied a residential property as their PPR for 10 years prior to disposal, no CGT will arise in respect of any chargeable gain which may accrue to that individual on foot of their disposal of same. However, if the individual only occupied the property as their PPR for 7 of the 10 years in which they owned the property, they will pay CGT in respect of 20% of the chargeable gain which may arise on foot of their disposal of same, as the portion of the gain which relates to the period in which the individual occupied, or is deemed to have occupied, the property as their PPR is fully relieved from CGT.

In addition to the last 12 months of ownership of a PPR, certain other periods of absence from the PPR in the course of an individual’s ownership of same may be deemed to be periods of occupation for the purposes of PPR relief. These include periods of absence during which both of the following circumstances apply:

* the individual seeking to rely on PPR relief (who would normally live alone) was receiving care in a hospital, nursing home or convalescent home, or was resident in a retirement home on a feepaying basis, and

* the PPR in question remained unoccupied during the period of absence.

This treatment allows an individual to avail of necessary care services while still qualifying for PPR relief throughout that deemed period of occupation. It appears, however, that in the circumstances outlined by the Deputy, the individual being cared for remained in their own home; as such the period of deemed occupation for the purpose of PPR relief as outlined above is not applicable in these circumstances. The legislation does not provide for a period of deemed occupation to arise in circumstances where an individual moves out of their PPR, and into the home of another person, to provide full-time care.

It should be noted that the specific facts and circumstances at the time of disposal of the property in question will determine the application of any relief and the amount of CGT which may be due in respect of the disposal. Further information on PPR relief may be found on Revenue’s website at: www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/principal-private-residence-ppr-relief.aspx