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9 In 10 Want To See An Overhaul Of Tax Return Rules Around Property Sales

  • 9 in 10 want to see an overhaul of tax return rules around property sales
  • 6 in 10 call for a simplification of Ireland’s “unnecessarily complicated” tax rules
  • Experts warning many people are unaware of their CGT tax obligations ahead of the January tax payment deadline

Almost nine in ten (88pc) Irish taxpayers believe the tax return rules around profits made from the sale of property should be revamped and/or simplified.

This is according to the latest instalment of the Taxback Taxpayer Sentiment Survey, which polled over 2,000 taxpayers nationwide.

The calls, which are being made ahead of the January 31 payment deadline for Capital Gains Tax (CGT), come as a result of confusion around the tax rules on profits made from the sale of a property (e.g. second homes or investment properties) by an individual.  

In Ireland, any CGT due on profits made from the sale of a property must usually be paid in the year the property is sold – though it is usually the following year that any profits made from that sale are actually declared in a tax return. However, for any profits made between December 1 and December 31, any tax due should be paid on or before January 31 in the following year, meaning that this coming January 31 is the payment deadline for CGT due on gains made in December 2023.

Six in ten (57pc) taxpayers believe these rules are an example of Ireland’s unnecessarily complicated tax system and should be simplified. A further three in ten (31pc) believe that the rules around CGT returns should be changed so that any CGT due from the sale of the property is paid in the same year as any profits made from that sale are declared in a tax return.  

Commenting on the survey results, Marian Ryan, consumer tax manager with Taxback said:

“The CGT bill due from the sale of a property is one area in which people could easily get caught out. The deadlines for CGT returns and payments are confusing, and could be particularly so for someone who isn’t tax-savvy. For example, any CGT due must be paid before you file your tax return – this is the inverse of the situation with self-assessment income tax returns.

Furthermore, not only do the deadlines for CGT returns and payments fall in different years, the exact date CGT payments are due will depend on when the profits were made. For profits made between January 1 and November 30, any tax due should be paid on or before December 15 in the same year.

For profits made between December 1 and December 31, any tax due should be paid on or before January 31 in the following year.

In addition, while CGT is typically not due on the sale of a family home, a CGT return must still be filed as a tax exemptionand will need to be claimed. We believe many people are simply unaware of this rule.
Taxpayers could incur penalties and interest if they fail to comply with the rules around CGT – yet, those rules are not easy to follow.We believe there is a strong case for simplification of the rules around CGT returns and payments, particularly in Ireland where there is such a strong attachment to property and where two-thirds of the population own their own home.

For regular updates and insights into Ireland’s construction sector, stay informed at www.breakingground.news. Also, be sure to share your industry news by emailing editor@breakingground.news

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