Hi everyone,
I’m working through my CGT calculation and getting stuck on what exactly counts as the “ownership period days” when applying the main residence exemption and 6-year rule.
Here are my details:
- Sale price: $565,000 (contract of sale on 06/06/2025)
- Adjusted cost base: $327,794.36
- Capital gain (before exemptions): $565,000 − $327,794.36 = $237,205.64
Timeline:
- Total ownership: 09/03/2011 → 06/06/2025 (5,203 days)
- Lived in as main residence: 09/03/2011 → 29/12/2012 (616 days)
- 6-year rule (rented out but still treated as main residence): 30/12/2012 → 30/12/2018 (2,191 days)
- Rented beyond 6 years (taxable period): 31/12/2018 → 06/06/2025 (2,349 days)
I’ve used the following formula to calculate the taxable portion:
Taxable gain before discount = Capital gain × (Period over 6 years when rented ÷ Ownership period days)
However, I’m unclear on what exactly the “ownership period days” should be in this context.
Should it be:
A) The total ownership period (5,203 days) — from purchase to sale, or
B) The combined period of when it was rented (i.e. 6-year rule period + period over 6 years = 2,191 + 2,349 = 4,540 days)?
I’ve looked at the ATO’s Roya example under “Former home used to produce income for more than 6 years,” but I’m still unsure how “ownership period” is being treated there.
Would appreciate any clarification (ideally with an ATO reference) on which interpretation is correct.
Also is the formula I am using correct?
Thanks in advance!
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