Hi, how do I estimate CGT on a primary residence I've owned for 15 years and AirBnB'd for about 10 years. I AirBnB'd one room/ shared access to lounge/ kitchen ( which I guess I calculate at 50% of the common area) as a percentage of the total floorspace. In total, over 10 years , the house was occupied by AirBnB'ers for 70nights. Would my CGT be Total Gain * (Floor space%/100) * (Days rented /Days owned) * (years AirBnB'd/ years owned)? I am very confused by this and stopped AirBnB once I realised that there would be a CGT component at sale. thanks
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Would my CGT be Total Gain * (Floor space%/100) * (Days rented /Days owned) * (years AirBnB'd/ years owned)?
- Unlikely, you added an extra step 4 & 5
- There's also the valuation of home when first used to produce income so the number of days owned could be different
- Use days not years
- https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business#ato-Workoutyourcapitalgainorloss
- https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/using-your-home-for-rental-or-business#ato-Valueofhomewhenfirstusedtoproduceincome
Would look more like: gain/loss x (rented out floor space%) x (total days available or rented on Air BnB)/(total days since purchase or total days since first on Air BnB)
- https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-property-genuinely-available-for-rent
- Total days for since purchase or since first time on AirBnB will likely depend on your MRE availability from purchase of property till before the first day on AirBnB
Any gain (after 50% discount) should be minimal at worst. Renting out one room for 70 days over 10 years (approx 3652 days) will mean 0.019 of any gain. Then only a percentage of the floor area as well.
From link
"When working out your eligibility for a full or partial CGT main residence exemption, you need to factor in both:
- floor-area of the residence you rent
- the number of days the property was used to generate income"
Capital gains tax when renting out accommodation | Australian Taxation Office
You will need to obtain a market valuation of your home as at the date the room was first rented.
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