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Steven1919(Newbie)Newbie
12 Sept 2025

I'm after some advice please, I moved out of my long term main residence in February 2019 and rented this property out. I purchased a new property for $1.2M and lived there for a two year period and then decided to also rent this out as an investment property in 2021. I had this property valued at $1.3M at the time i started to rent it out. At the same time I moved back to my original main residence under the six year rule. I'm now selling the investment property and my question is do I use the CGT cost base the original purchase price or the value it was worth when I started renting it out. Thank you

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9 replies
156 views
9 replies

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
12 Sept 2025

Original purchase price. Market value when first rented rule is only used when

  • "you would have been entitled to a full exemption if the sale or other CGT event happened to the property immediately before you first used it to produce income."

As you are considering your first property as your main residence for the whole period you owned the second property then you use purchase price as cost base.

See market value rule below - section When the rule applies

Using your home for rental or business | Australian Taxation Office

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Most helpful reply

Taxduck(Taxicorn)Taxicorn
12 Sept 2025

Original purchase price. Market value when first rented rule is only used when

  • "you would have been entitled to a full exemption if the sale or other CGT event happened to the property immediately before you first used it to produce income."

As you are considering your first property as your main residence for the whole period you owned the second property then you use purchase price as cost base.

See market value rule below - section When the rule applies

Using your home for rental or business | Australian Taxation Office

Liked by Steven1919
Steven1919(Newbie)Newbie
12 Sept 2025

Thank you Taxduck, Can I claim holding costs for CGT for this property, it was off the plan and i incurred expenses before settlement, for example Legals, stamp duty and interest on the 10% deposit I borrowed against my main residence mortgage?

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