Will I have to pay Capital Gains Tax (CGT) if I decide to sell my house after living in it for 12 months?

Information verified correct on December 8th, 2016

Question from TJ: I bought a home in 2005 and lived in the house until 2007 before I was transferred overseas for work. From 2008 to 2014, I have rented out the property. I was a non-tax resident when submitting tax returns during this period. I am planning to move back to Australia next year (2015) and move back into the house and live in the property for at least 12 months. Will I be subject to Capital Gains tax if I decide to sell the house after residing in the home for 12 months one I return?

A property first established as a Main Residence (MR) immediately after acquisition will be exempt from capital gains tax (CGT) when sold at a profit.

The house can continue to be nominated as the main residence for another 6 years while rented. If sold within those 6 years it will be exempt from CGT.

The condition is that no other property can be nominated as the main residence. Where the rental period exceeds the 6 years, some CGT may be assessable.

CGT will be calculated based on the difference between the sale price and the cost base. The cost base will be the market value when first rented.

Once the capital gain is calculated, a partial exemption is available for the period of occupation as a main residence, which includes the 6 years and the 12 months of re-occupation.

For a more detailed discussion of your circumstances, please contact The Property Tax Specialists today.

For more advice on property investment issues, check out our property investment hub.

DISCLAIMER: Readers should not act on the information above without obtaining professional advice relevant to their circumstances. It is intended as information only.

Was this content helpful to you? No  Yes

Related Posts

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback