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Comments

Jon

What happens in the case of a derelict property that was acquired at a price that reflects perhaps only the value of the land. The purchaser then spends considerably more than the purchase price on improving the property. After a number of years the owner now sells the property at considerably more than the original purchase price but only marginally more than the purchase price plus the improvements. If I have understood this correctly then it is likely that after CGT is applied the owner will incur a significant loss on the property. Will this not result in a reluctance by the buyer to improve a property? The knock-on effect from this could result in significantly reduced revenue for the Tax Office.

Jon

Guillaume Barlet

Jon,

The article above only focuses on what will change compared to the current CGT calculation. I have therefore not mentioned the current rules that will stay in place. One these rules is to deduct works done on the property depending on certain prerequisites.

Capital gain on an entirely rebuilt property would usually be calculated as the difference between the sale price and the value of the property on completion of the works. Of course without having any details it is difficult to guarantee this would be applicable in your case.

Regards,

Guillaume

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