Six-year rule


Question: We’re planning to rent out our principal place of residence (PPOR) for a couple of years while we go travelling and then move back into it later. We then want to renovate and sell it. What are the applicable taxes in this situation? Can we still claim a capital gains tax (CGT) exemption?

Answer: Assuming that this property was your PPOR from the outset, you are entitled to move out and still nominate this property as your PPOR for up to six years before this property would be subject to CGT. Therefore in the case above, if you moved back into the property after a couple of years of travel and renovated and sold it, it would be exempt from CGT and any other taxes on sale. However, while you are renting the property, be aware that you may be subject to land tax each year, dependant on the state of jurisdiction.

David Naylor from Chan & Naylor

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Chan & Naylor is an accountancy firm that specialises in the areas of asset protection, wealth creation through property investing, estate planning and tax planning. The company ranks in BRW’s top 100 accountancy firms in Australia. For more information, phone (02) 9391 5400 or visit The advice contained in this report is general in nature and its preparation has not taken any individual circumstances, objectives or financial needs into account. Readers are advised to seek appropriate advice from licensed professionals before embarking on any investments.


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