Your Investment Property forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Six-Year CGT rule, Tax on non-residents and CGT when selling a previously rented PPOR

Notify me of new replies via email
Your Investment Property | 20 Feb 2014, 01:21 PM Agree 0
Our tax experts are on hand to answer any tax queries you may have regarding your property investments and wealth creation strategies. Email your taxing questions to [email protected]
  • JW | 20 Oct 2016, 01:21 PM Agree 0

    I have a property I bought and moved into as my principal residence in 2001. I then rented it out from 2002 (and had it valued at that point) to live with my parents before moving overseas in 2004.

    I rented in the UK until 2007 where I purchased a residential property again but in the UK and lived in it until 2015. In 2016 I moved back to Australia and rented a another place and continued to rent out my original property (the one bought in 2001).

    I am now selling and trying to work out if I am entitled to use the 6 year rule and for what period of time?


    • DAVE TRUEMN | 19 May 2017, 08:28 PM Agree 0
    • Chris | 23 Jun 2017, 09:41 PM Agree 0
      We have a similar situation and were told by our accountant that the six year rule does not apply if you do not make the property your PPR within the six years ie. if it is more tan six years, the six year rule just does not apply.
  • MHB | 04 Nov 2016, 12:15 PM Agree 0
    Hi there, I would like to buy a house in Tasmania (I currently live in Sydney). The idea would be to buy the property and rent it for between 1 -3 years by which time I would be able to move to Tasmania and use the house as my home. I would expect to stay there for at least 5 years - probably much longer. While it was rented the property would be negatively geared. What does this mean for CGT if I sold the property? Regards MHB
  • Jay | 05 Apr 2017, 10:56 AM Agree 0
    I purchased my property in 2004 and lived in it up until 2011. It was leased out in June 2011 and the 6 year anniversary is coming up this year. The tenants should be moving out shortly and that would make it almost 6 years in total.

    If I left the house vacant for a period of time after the tenants move out (e.g. 3-6 months and not available for rent), can I move back into the property afterwards resetting the 6 year rule? If so, how long do you need to move back into the property for before this 6 year rule is reset?
  • Orpheus | 19 May 2017, 03:48 PM Agree 0
    We purched a property in 1989 and rented it from 2002 to 2009. We Occumpied it again as outr main dwelling for 10 months. Rented it again in Sep 2009 until we sold it in May 2017. Do we get any part of Capital gain from Tax?
  • Henry | 22 Jun 2017, 10:36 AM Agree 0
    I bought the house in 2009 and I was living in that house for about 6 years and I have rented it out in 2015 because I moved to live with my sister. Do I need to pay Capital Gain tax?
    • | 22 Jun 2017, 10:37 AM Agree 0
      Are you an Australian resident? Have you bought another PPOR since moving out in 2015? If not, you should be able to avoid CGT with the 6-year rule.
  • Ron | 22 Nov 2017, 10:02 AM Agree 0
    Hi, I bought a property in Bentleigh in 2014 as my primary place of residence PPOR.
    I am planning on getting married in April 2017 and move into my Fiance's property which she bought in North Melbourne in 2015.

    The plan is to live at her place for 2 years and rent out my Bentleigh place. After 2 years (2019) we will move back to my place in Bentleigh.

    Would being married and living in North Melbourne automatically change my PPOR?
    When I move back to my place in Bentleigh and live in it would I automatically be exempt from capital gains due to the 6 year rule?
    If I plan on selling my property in Bentleigh any time in the future would I be subject to capital gains tax based on the scenario above?

    Many Thanks
    • ML | 26 Nov 2017, 10:36 PM Agree 0
      Hi Ron,

      Your PPOR would change to North Melbourne for the duration that you are there (once you are married / de facto relationship) as you can't have more than 1 PPOR at a time.

      You will lose the CGT exemption on your Bentleigh property for the duration you are at North Melbourne. If you eventually sell Bentleigh the CGT will be calculated as either (choose the lowest):
      * If you had valuations done at the time of moving out and moving back in, then the difference multiplied by 50% discount; or
      * If you sold the property after, say 20 years, then CGT would be (sale price - cost price) * (2 years / 20 years) multiplied by 50% discount.

      Don't forget that the CGT amount calculated above is paid at your marginal tax rate, so the amount actually paid to the ATO will reduce further.

      CGT is not payable for the duration that the property was deemed to be your PPOR.
  • Johnny | 07 Feb 2018, 02:44 PM Agree 0
    I purchased my brand new unit in 1998 and lived there till 2001. From 2001 to 2004 I had rented it out, then moved back in around 2005 and lived in there till Sep 2016. I then rented it from Nov 2016 til current and am selling unit around May 2018 this year. Am I going to be hit with any CGT when I sell? Thanks
    • Property88 | 07 Feb 2018, 02:49 PM Agree 0
      As the 6-year rule resets every time you move back in, you should be exempt from GST, provided you didn't own another PPOR during the times that you rented it out.
  • Vera | 18 Feb 2018, 03:39 PM Agree 0
    Hi, any hints on how to maximise the profit & CGT: I intend to sell an investment property in which I never lived in. Bought it in 2009. Tenants are moving out soon and I am intending to renovate it shortly after. I did not manage to utilize the 6 yrs rule because I was working in another city and it was not able to move in. However, I have purchased another investment property and also intend to sell next year or the year after. I also don't think I can live in the new property but is it going to be better for me to move in the 2nd investment property 1 year before the sale? How will this improve my CGT if I decide to sell?
  • horst | 04 Apr 2018, 11:15 AM Agree 0
    hey there

    i am citizen,
    i lived in my property for 1 year and then started renting it our fulltime on airbnb.
    can i apply the six year rule?

    i dont claim any other residence.

    alternatively i rent out the house to an agency full time which then rents out the place as hoiday rental.

    i kw the tax office makes some sort of distinction betwene permanent rental and aibnb
    can you please advise?
    i am planning to sell after 5 years
Post a reply