If I sell my principal private residence this year (bought 12 years ago) and I make a loss (circa €30,000), am I entitled to offset this loss against future capital gains tax on an investment property ?
Mr A. McG., email
I'm afraid not. The general rule is that if you cannot make a taxable gain from a disposal, you can not accrue a capital loss from the same transaction.
Your principal private residence – or main family home in ordinary terms – is not liable to capital gains tax (CGT). If, as for most people, you sell your family home for more than you initially paid for it, you do not have any tax liability. This is the single major exemption under CGT legislation given that, for many of us, our family home will be the single biggest investment that we make.
However, as it is not liable for tax under capital gains, the corollary is that you cannot use it to accumulate a loss that would be set against other gains.
This might certainly seem unfair to a generation who, like you, are left nursing significant losses on their family home – even assuming they are no longer in negative equity on the mortgage – but it is difficult to fault the fairness or logic of the tax authorities in this instance.
Your €30,000 is, unfortunately a write-off in this situation.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.
