Capital Gains Tax (CGT): Calculating the 33% Irish Liability on Foreign Property Sales
Introduction
For Irish expats and investors, selling a property abroad can be a lucrative move—but it also triggers a Capital Gains Tax (CGT) liability in Ireland. The standard Irish CGT rate remains 33 % in 2025, and it applies to worldwide gains for anyone who is resident or ordinarily resident in Ireland at the time of disposal.
This guide walks you through the step‑by‑step calculation of Irish CGT on foreign property sales, explains the key exemptions and reliefs (including the €1,270 annual exemption and foreign tax credit), and highlights practical tips for Irish residents, non‑residents and dual‑taxpayers.
1. Who Is Subject to Irish CGT on Foreign Sales?
| Status | CGT Liability on Worldwide Gains |
|---|---|
| Resident (tax resident for the year) | Full liability on all disposals, Irish and foreign |
| Ordinarily Resident (resident for 3 of the previous 4 years) | Same as resident – worldwide liability |
| Non‑resident (no Irish tax residence) | CGT only on Irish‑situated assets (e.g., Irish property) – foreign disposals are generally exempt, unless a tax treaty attributes them to Ireland |
Key point: Most Irish expats retain Irish tax residence if they spend 183 days or more in Ireland in a tax year, or 280 days over two consecutive years. Verify your residency status before calculating CGT.
2. The Basic CGT Formula
The Irish Revenue provides a simple formula:
Taxable Gain = (Sale Price – Allowable Costs) – Exemptions
Irish CGT Payable = Taxable Gain × 33%
When foreign tax has already been paid, you can claim a foreign CGT credit (see Section 4). The credit reduces the Irish liability but cannot create a refund – it is limited to the Irish tax due on the same gain.
3. Step‑by‑Step Calculation for a Foreign Property Sale
3.1 Gather the required figures
| Item | Where to find it |
|---|---|
| Sale price (in foreign currency) | Sale contract, bank statement |
| Acquisition cost (purchase price + stamp duty, legal fees) | Purchase contract, solicitor’s invoice |
| Enhancement/Improvement costs (e.g., renovations) | Receipts, contractor invoices |
| Disposal costs (agent fees, legal fees) | Sale agreement |
| Foreign tax paid (if any) | Local tax authority statement |
| Exchange rate on the date of acquisition and disposal (or average rate for the year) | Central Bank of Ireland or ECB rates |
Tip: Use the official Central Bank of Ireland foreign exchange rates for the exact dates. Round to two decimal places.
3.2 Convert all amounts to euros
€ Sale Price = Foreign Sale Price × Exchange Rate on disposal date
€ Cost Base = (Purchase Price + Stamp Duty + Legal Fees + Improvements) × Exchange Rate on acquisition date
€ Disposal Costs = Fees × Exchange Rate on disposal date
3.3 Calculate the gross gain
Gross Gain = € Sale Price – (€ Cost Base + € Disposal Costs)
3.4 Apply the annual exemption
For the 2025 tax year, the annual CGT exemption is €1,270 per individual (or €2,540 for a married couple/civil partners jointly). Subtract this from the gross gain.
Net Gain before foreign credit = Gross Gain – €1,270
If the result is negative, you have a capital loss that can be carried forward indefinitely.
3.5 Claim foreign CGT credit (if applicable)
- Determine foreign tax attributable to the gain (must be a CGT‑type tax, not a property tax).
- Convert foreign tax to euros using the same exchange rate as for the disposal.
- Credit limit: The credit cannot exceed the Irish CGT that would have been payable on the same gain.
Irish CGT before credit = Net Gain × 33%
Foreign tax credit (max) = min(Foreign Tax € , Irish CGT before credit)
Irish CGT payable = Irish CGT before credit – Foreign tax credit
3.6 Example calculation
| Item | Amount (USD) | Exchange Rate (USD/€) | € Equivalent |
|---|---|---|---|
| Sale price | $350,000 | 0.91 | €318,500 |
| Purchase price | $200,000 | 0.92 | €184,000 |
| Stamp duty (5 % of purchase) | $10,000 | 0.92 | €9,200 |
| Legal fees (purchase) | $2,500 | 0.92 | €2,300 |
| Renovation costs | $30,000 | 0.90 | €27,000 |
| Sale agent fees (2 % of sale) | $7,000 | 0.91 | €6,370 |
| Total cost base | – | – | €222,500 |
| Gross gain | – | – | €96,000 |
| Annual exemption | – | – | €1,270 |
| Net gain before credit | – | – | €94,730 |
| Irish CGT @33 % | – | – | €31,261 |
| Foreign CGT paid (US) | $15,000 | 0.91 | €13,650 |
| Foreign tax credit (capped) | – | – | €13,650 |
| Irish CGT payable | – | – | €17,611 |
The Irish taxpayer would owe €17,611 in CGT, payable by the relevant deadline (see Section 5).
4. Foreign CGT Relief – What You Can Claim
Revenue’s Foreign CGT Relief allows a credit for foreign tax that is:
- A tax on the gain (not a property tax or wealth tax).
- Paid on a disposal that is also chargeable in Ireland.
- Documented with an official tax assessment or receipt.
4.1 Common qualifying foreign taxes
| Country | Typical CGT‑type tax | Notes |
|---|---|---|
| United States | Federal capital gains tax (Schedule D) | Must be a final tax liability, not a provisional estimate |
| Spain | Impuesto sobre la Renta de No Residentes (IRNR) – capital gains | Must be a final assessment |
| Portugal | Imposto sobre Mais-Valias | Same rules apply |
| USA (state level) | State capital gains tax (e.g., California) | Can be claimed if it is a CGT‑type tax |
4.2 Non‑qualifying taxes
- Stamp duty, property transfer tax, municipal taxes, wealth taxes, inheritance tax – these cannot be claimed as a foreign CGT credit.
4.3 How to claim the credit
- Complete Form CG1 (Capital Gains Tax Return) and attach a copy of the foreign tax assessment.
- Include the exchange‑rate conversion details.
- The credit is automatically applied by Revenue when the return is processed.
5. Payment Deadlines & Filing Requirements
| Disposal period | Irish CGT payment deadline |
|---|---|
| 1 January – 30 November 2025 | 15 December 2025 |
| Disposals made in December 2025 | 31 January 2026 |
Filing deadline for the CGT return (Form CG1) is 31 October of the year following the tax year, or mid‑November if filing online via ROS. Even if the credit reduces your liability to zero, you must still file a return for any chargeable disposals.
Payment methods:
- Revenue Online Service (ROS) – fastest and provides an automatic receipt.
- myAccount on Revenue.ie – for individuals not registered for ROS.
- Bank transfer – using the reference number supplied on the ROS statement.
Late payment incurs interest (currently 8 % p.a.) and potential penalties (up to 10 % of the tax due).
6. Special Reliefs That Can Reduce the 33 % Rate
| Relief | Who can claim | Effect on CGT |
|---|---|---|
| Private Residence Relief | Owner of the property that was their main home | Up to 100 % relief for periods of occupation; the non‑occupied period is apportioned. |
| Retirement Relief | Individuals aged 55 + disposing of business assets (including property used in a trade) | Reduces taxable gain; lifetime cap €10 million for transfers to children 55‑69. |
| Angel Investor Relief | Investors in qualifying start‑ups | CGT rate reduced to 16 % (or 18 % for certain funds). |
| Venture Capital Relief | Investors in qualifying VC funds | CGT rate reduced to 15 %. |
| Spouse/Civil Partner Relief | Transfers between spouses/civil partners | Treated as a no‑gain disposal – no CGT. |
When any of these reliefs apply, the effective CGT rate can be far lower than the headline 33 %.
7. Practical Tips for Irish Expats
- Confirm your Irish residency each tax year – a change can swing your liability from worldwide to Irish‑only.
- Keep detailed records of purchase, improvement, and disposal costs, plus foreign tax assessments. Digital copies stored in a cloud folder simplify ROS filing.
- Use the same exchange rate for the acquisition and disposal dates (or the average rate for the year if the dates are close) to avoid rounding disputes.
- Plan the timing of the sale: disposing before 30 November gives a December payment deadline, while a December sale pushes payment to the following January – useful for cash‑flow management.
- Consider pre‑sale tax planning:
- Offset any existing capital losses from previous years.
- Explore whether Private Residence Relief can be claimed for periods of occupation.
- If you expect to be non‑resident next year, you might accelerate the sale to a year you remain resident.
- Engage a tax adviser familiar with cross‑border issues. The foreign tax credit calculation can be complex, especially with multiple jurisdictions.
8. Frequently Asked Questions (FAQs)
Q1: Do I need to pay Irish CGT if I’m a non‑resident?
A: Generally no, unless the foreign disposal is treated as Irish‑situated under a tax treaty. Most foreign property sales by non‑residents are exempt from Irish CGT.
Q2: Can I claim the €1,270 exemption for each property sold?
A: The exemption is per individual per tax year, not per asset. If you sell multiple properties, the total gains are reduced by a single €1,270 amount.
Q3: What if the foreign tax rate is higher than 33 %?
A: The foreign tax credit is capped at the Irish CGT due on the same gain. Any excess foreign tax cannot be refunded, but you may be able to claim it in the foreign jurisdiction.
Q4: How long can I carry forward a capital loss?
A: Indefinitely. Unused losses can be applied against future gains in any subsequent year.
Q5: Do I need to report gifts of foreign property?
A: Yes. A gift is treated as a disposal at market value, attracting CGT (subject to exemptions and reliefs). Gifts to a spouse/civil partner are exempt.
9. Summary Checklist for Calculating Irish CGT on a Foreign Property Sale
- Verify Irish tax residence status for the year of disposal.
- Obtain sale price, acquisition cost, improvement costs, and disposal fees in the foreign currency.
- Record the exact exchange rates on acquisition and disposal dates (Central Bank of Ireland).
- Convert all amounts to euros.
- Calculate the gross gain: Sale price – (cost base + disposal fees).
- Apply the €1,270 annual exemption (or €2,540 for couples).
- Determine any foreign CGT paid and convert to euros.
- Claim foreign tax credit (capped at Irish CGT on the same gain).
- Apply any additional reliefs (Private Residence, Retirement, Angel, etc.).
- Compute final Irish CGT payable (33 % of the net gain after exemptions and credits).
- File Form CG1 by 31 October (or mid‑November online) and pay by the relevant deadline (15 December or 31 January).
Conclusion
Irish residents selling overseas property must navigate a clear but detailed calculation process to determine their 33 % CGT liability. By converting foreign amounts accurately, claiming the €1,270 exemption, and applying the foreign CGT credit where eligible, you can minimise the tax bite.
Staying on top of residency status, keeping meticulous records, and planning the timing of disposals are essential steps for any Irish expat or investor. When in doubt, a qualified tax adviser with cross‑border expertise can ensure compliance and optimise your overall tax position, protecting the wealth you’ve built abroad.