Which home should I pay tax on?

Q I have taken redundancy and now intend splitting my time between my holiday apartment in Donegal and my house in Dublin for at least a year or until I decide what to do next. Knowing this was coming I didn’t do anything about the second home tax as I didn’t know which to register as the second home. Now both are my home so does the tax apply to me?

AYou do have two properties and as such one will be liable for the so-called second home property tax (nppr.ie). The main thing for you to decide is which property is your "main residence" – both of them can't be.

A “sole or main residence” is very basically defined by Revenue as “the residence which is your home for the greater part of the time”.

Which is it? Which do you put down on your tax return? Do you claim tax relief on the mortgage – if so, on which one?

Let’s say you decide that the Donegal apartment is your principal private residence, then the Dublin house is a second home and that could have expensive capital gains tax implications for you if and when you decide sell up.

Your most immediate concern is non-payment of the second home tax as there are severe late payment penalties. Did you own the Donegal apartment on July 31st, 2009? If so, you should have paid the tax and will now be subject to late payment penalties. The sooner you put this in order the less expensive it will be in the long run.

Do I have to pay CGT after living abroad?

Q We will be moving abroad to take up a contract with the company I work for. It will be for a minimum of one year. Ours is a “starter” home bought 16 years ago which we did a lot of work on; despite the downturn in the market, I estimate it would yield a capital gain of up to €200,000.

Our intention was always to sell and trade up, which we will when we come home. But I don’t want to pay capital gains tax and there simply isn’t time in this slow market to sell up before we have to leave. Any advice?

AIn general there is no capital gains tax on a property that has been a continuous principal private residence. Also, in general, if you rent out your home for a time, when you sell your home, that "time" will incur a capital gains liability.

However, if you are prevented from occupying your residence because of employment – a time away that does not exceed four years – then that period of absence will be regarded as occupation. However the one caveat is that you must live in the residence both before and after the period of absence.

• In last week's column a query regarding a fence appeared as 2ft when it should have read 2m. The answer is the still the same. A front fence or wall cannot exceed 1.2m.

Your questions

Send your queries to Property questions, The Irish Times, The Irish Times Building, 24-28 Tara Street, Dublin 2 or e-mail propertyquestions@irishtimes.com. This column is a readers’ service and is not intended to replace professional advice.