I'm confused.
According to my reading of
the "6 year rule" period can be reset by leaving the property vacant (see heading "Former home used for income" - last bullet point in that section)
Former home used for income
If you use your former home to produce income (for example, you rent it out or make it available for rent), you can choose to treat it as your main residence for up to 6 years after you stop living in it. This is sometimes called the '6-year rule'.
You can choose when to stop the period covered by your choice. For example, if you rented it out for 5 years, you can choose to treat the property as your main residence for 3 years.
If you're absent more than once when owning the property, the 6-year period applies to each period of absence. A period of absence stops when you either stop renting your home and:
- move back in
- leave it vacant.
I've asked my accountant and a few others who say that the period only resets if you move back in so it is your main residence again.
I think the relevant legislation is INCOME TAX ASSESSMENT ACT 1997 - SECT 118.145(2)
http://www8.austlii.edu.au/cgi-bin/viewdoc/au/legis/cth/consol_act/itaa1997240/s118.145.html
(2) If you use the part of the * dwelling that was your main residence for the * purpose of producing assessable income, the maximum period that you can treat it as your main residence under this section while you use it for that purpose is 6 years. You are entitled to another maximum period of 6 years each time the dwelling again becomes and ceases to be your main residence
Is that the correct section? My accountant points me to Section 160ZZQ 11a but I can't locate that.
Where does the "leave it vacant" idea come from? Is it backed up with legislation?
In essence wondering if we can:
- buy place
- move in so it is main residence
- move out and rent it for 6 years
- leave it vacant for 6 months
- rent it out for 6 years
- leave it vacant for 6 months
- rent it out for 5 years
- sell it and use main residence exemption
That's not the exact plan but gives the general idea.
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