What tax would I pay on any profit from renovating and selling a house?

Answer 1

Some of your other answers are plain wrong.

If the house has ever been tenanted you will pay Capital Gains Tax at your prevailing tax rate (22 or 40%) after your allowances have been taken out. As these are £8800 this year plus various others, you may owe no tax at all.

If you have just bought the house to do up and sell on, and it was never intended to be tenanted, you will pay income tax on your profit.

If you bought the house to live in as your main residence, you will pay nothing as it qualifies for PPR (Principal Private Residence) relief.

Good luck, but always consult an accountant and remember to keep all your receipts!

Answer 2

If you make a regular habit of doing up properties and selling them on, like Saphire says, this does not fall within Capital Gains liability.

This is because regular transactions of a similar nature with a profit seeking motive, for example buying a property twice a year (yes, even whilst you live in it), to do up and sell on for a profit can amount to a trade therefore you will be charged income tax upon it, but on a plus side you will only pay tax on your profits from the venture as the expenses used to renovate the property will be deductable from your profits.

I hope this helps, but seek professional advice before you make any decisions.

P.s Just because other people tell you that 'their mate' gets away with it doesn't mean that it is strictly correct.

For the people that think this is the government 'screwing' people out of hard earned cash - if someone is making a profit from trading then this is no different from someone earning wages from employment. Any income earned from a trading source is taxable regardless of which European state you live in.

Answer 3

If it's your own dwelling (and you have no other home) you pay no tax. Otherwise you're liable for Capital Gains Tax, which is 40% after the first £7,000. So if you make - say - £10,000, you'll have to pay 40% of £3,000 ie: £1,200.

If you're married or have a partner, I'd suggest putting half in their name. Then you each get the £7000 tax free allowance and would not start paying tax until the profit was £14,000.

Answer 4

Capital Gains Tax. The first £8,800.00 of your profit in 06/07 is tax-free, then the bands are 10%, 20% and 40% dependent on your other income.

Answer 5

This may be taxable as income tax as opposed to capital gains tax if you are a property developer ie you will not be allowed to use your annual exemption for CGT purposes. Be careful of the rules regarding living in the property and classing it as your principal private residence. It is a somewhat murky area but I believe there needs to be some sort of evidence that the property was purchased with the intention of living in it. If you can prove this then the last 3 years of ownership are exempt for CGT. The thing to remember - if they can tax it they will!

Answer 6

If you bought it to renovate and sold it without being a tenant i.e. living in it as your primary residence, you would be liable for Capital Gains Tax.

Answer 7

Lots and lots Gordon and Tony will take you for everything they can. But seriously if you live in the house for at least 6 months it significantly reduces the tax bill. Speak to an accountant they can advise you with the exact details.

Answer 8

capital gains. Unless you live in it while you renovate.Two guys i know have a very succesful business renovating cottages. They live in them and sell on when finished. Their last property sold for £2.5 million,

Answer 9

what ever this poxy government can screw out of you... My advice is get yourself a good accountant, I just took a new one on for my pub, and what he doesnt know about tax and ways round it, just isnt worth knowing, he great saved me a load of money!!!!