IRD clarifies tax-free sale of homes and personal vehicles

Thursday, 25 June 2026 06:40 - - {{hitsCtrl.values.hits}}

The Inland Revenue Department (IRD) yesterday clarified that individuals can sell their residential properties and personal vehicles without paying tax, subject to specified conditions under the amended Inland Revenue Act.

Residential property owners would qualify for a full tax exemption on the sale of a house if they have held legal ownership of the property for at least three years prior to the sale and have resided at the property for more than two years during that period.

If both conditions are satisfied, the entire proceeds from the sale would be exempt from tax, it said.

The IRD also clarified that transfers of property to family members or children are exempt from tax, with tax implications arising only when properties are sold to third parties.

In relation to vehicles, the IRD said the previous taxation framework has been removed under the Inland Revenue (Amendment) Act, No. 11 of 2026.

According to the Department, gains arising from the sale of personal vehicles have been exempt from tax with retrospective effect from 1 April 2024.

The exemption applies regardless of a vehicle’s age, condition, or model, provided it is a personal vehicle and not held as trading stock or as a business asset.

As a result, the full profit arising from the sale of a personal vehicle is exempt from tax.