Cgt on a first house I haven't lived in

[Pshouae]

Hi guys,

I've been living with my parents for a the last few years, I bought a house 3 months ago to move into that needed some work doing to it. It will be finished shortly and I've ended up doing 30k of work to it making the value of the house go up by 100k (70k profit). Now instead of moving in I want to sell it as I want to move else where.

As it's my first house (though I haven't been living in it) will I be subject to cgt? Will I have to live in it first and wait to move as to not pay cut or can I sell now?

Any advice

Many thanks

[bd6759]

It sounds very much like you bought the house with the intention of repairing it and selling it again. This would make it a trading venture and the profits will be liabile to income tax.

If it is not a trading venture, the gain will be subject to capital gains tax. In calculating the gain the costs of repairs cannot be deducted but the costs of enhancement can.

[AnthonyR]

The fact that it's your only/first house doesn't make any difference in terms of CGT. In order to get relief for CGT you will need to live in the house. This will need to be for a meaningful period of time and you will need to move out of your parents and genuinely live there (pay council tax, move bank accounts and driving licence address etc to prove you are living there). If you do this there should be no tax on the gains (certainly if you own it for less than 18m), but otherwise you are certainly subject to CGT on the gain and as previously mentioned it could be income tax if HMRC argue that your original intention was to buy, improve and sell in a short period.