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GAC(Newbie)Newbie
24 Jan 2024

Hello, I have just found out about the 6 year rule for main residence capital gains tax exemption and am hoping someone can guide me on whether I'm eligible or not.

We moved out of our property in December 2015 and then rented it continuously until we sold it in April 2021.


At the time we got the 50% CGT exemption.

Could we have got a full exemption as part of the 6 year rule?

And can we amend it and get a refund if so? I know there's a two year rule, but not sure if it applies to the event or the tax return date. If the tax return date count, we still have a month to resolve it!

Hoping someone can provide guidance?

Thank you!

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Cratsky(Master)Master
24 Jan 2024

You'll most likely be entitled to a part main residence exemption when you eventually sell that property assuming you declare it is indeed your main residence (for tax purposes) at the time of sale.


Using it to produce income for more than 6 years in one continuous block automatically removes your eligibility for the full main residence CGT exemption. You'll receive a part main residence CGT exemption based on the period you lived there and the period it was used to produce income.


https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence#ato-Formerhomeusedforincomee

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Most helpful reply

Cratsky(Master)Master
24 Jan 2024

You'll most likely be entitled to a part main residence exemption when you eventually sell that property assuming you declare it is indeed your main residence (for tax purposes) at the time of sale.


Using it to produce income for more than 6 years in one continuous block automatically removes your eligibility for the full main residence CGT exemption. You'll receive a part main residence CGT exemption based on the period you lived there and the period it was used to produce income.


https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/property-and-capital-gains-tax/your-main-residence-home/treating-former-home-as-main-residence#ato-Formerhomeusedforincomee

Ken_Oath(Master)Master
24 Jan 2024

Your question doesn't say anything about whether you owned and occupied another home concurrently with the home that has been sold.

The Main Residence Exemption (MRE) can only apply to one property at a time, and you effectively make a selection when the tax return is lodged after the first property is sold.

Yes, you may be able to amend your tax return, but you *might* not want to do that.

You really should have a meaningful discussion with an experienced accountant.

S/he can describe and discuss the many relevant taxing issues, and help you conclude good outcome/s.

Don't forget that any "free advice" you receive in this forum, is worth what you paid for it, ie nil (GST included).

I give you the best answer.

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Does the 6 year CGT exemption for main residence apply to me? | ATO Community