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PhongDam(Newbie)Newbie
12 Oct 2021

Hi everyone, My question is simple but could not find anywhere. I bought my first home in 2015 (Property A) and lived in there until 2018 and rented it out. I recently sold it in 2021. If applying 6 years rule, i will not have to pay any CGT because 2018 to 2021 is less than 6 years. However, when I started renting out the property A in 2018, I bought a property B to be my home and live in there until now. So how the CGT will be calculated if I gonna sell this property B in future? I am asking this because, ATO said there is only 1 main resident at the time so if we consider the property A is main resident, the property B where I am living is will be investment property. Thank you for reading.

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1,216 views
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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response13 Oct 2021

Hi @PhongDam, The 'six-year rule' means you have a couple of options: • You can continue treating Property A as your main residence from 2018 to 2021. This means Property B will only qualify for a partial CGT exemption (the period after the sale of Property A). • You can claim the main residence exemption for Property B from 2018 onwards. This means Property A will only qualify for a partial CGT exemption (2015 to 2018). It's up to you which option you go with. You don't have to decide until you prepare your tax return for the applicable income year (2020-21 or 2021-22 depending on when you sold Property A). You can find out more about treating a former home as your main residence on our website: https://www.ato.gov.au/individuals/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-(home)/treating-former-home-as-main-residence/

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Most helpful replyATO Certified Response

CaroATO(Community Support)Community Support
ATO Certified Response13 Oct 2021

Hi @PhongDam, The 'six-year rule' means you have a couple of options: • You can continue treating Property A as your main residence from 2018 to 2021. This means Property B will only qualify for a partial CGT exemption (the period after the sale of Property A). • You can claim the main residence exemption for Property B from 2018 onwards. This means Property A will only qualify for a partial CGT exemption (2015 to 2018). It's up to you which option you go with. You don't have to decide until you prepare your tax return for the applicable income year (2020-21 or 2021-22 depending on when you sold Property A). You can find out more about treating a former home as your main residence on our website: https://www.ato.gov.au/individuals/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-(home)/treating-former-home-as-main-residence/

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