Can I offset costs if I have lived in the property?
Question When the first part of property ownership is claimed as residential ownership (i.e. I live in the property) can:
a) purchase costs of the property be claimed as relief.
b) refurbishment costs, carried out during the residential period, be claimed as relief.
when you decide to sell the property?
The simple answer to this question is yes - both purchase costs and major refurbishment costs can be added to the acquisition costs of the property, to set off against the sale proceeds, to reduce the capital gain when the property is disposed of.
Louise buys her first home in August 1998 for £50,000. The purchasing costs are £700 and include solicitors fees, survey fees etc.
In May 1991 she has a conservatory built. The cost of this is £15,000.
In June 1995, she moves in with her long-term boyfriend and rents her property out.
She finally decides to sell her first home in June 2003, after having let it of 8 years. She is able to claim relief on the £700 purchasing costs and the cost of the conservatory against the capital gain.
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