My questions relate to CGT and the ‘6-year rule’ if we short-term let (AirBnB) our PPOR.
I must say that I have been around several documents and related community posts, a number of times, trying to get a clear answer in my head. I believe I may now have one - but please excuse my unfamiliarity with matters such as CGT.
We will soon move in to a house that we intend to keep as our PPOR for 10 years or more – we like the location.
We are at retirement age and so would like to travel. Rather than leave the house empty when we are traveling, we are considering having it short-term let. Before we do so, we are trying to understand the implications for tax in Australia.
If we moved out and rented the home empty for 6 months, my understanding is that there would not be any CGT. And, that we could repeat that 12 times over the years (12 x 6 months making 6 years).
I base this on reading “Capital gains tax and the main residence exemption”, and the second scenario in the table of “You lived in the property before renting it out for 6 years or less”.
QUESTION #1) Have I understood that correctly?
QUESTION #2) If we rented the house furnished, would the same apply?
As we are getting older, we think that we may end up doing shorter trips, and that would lean more towards using options like using an AirBnb manager.
An example here is that, after 3 months, we might fly away for 2 months, return and live back ‘home’ for a while and then travel away again for another 2 months.
We would never be present in the property while it was available for short-term let, nor have another PPOR.
My understanding is that there would not be any CGT - as long as we don’t repeat this example more than 36 times (36 x 2 months making 6 years).
QUESTION #3) Is my understanding correct? In essence, the MRE applies for up to 6 years of short-term letting - in these examples?
QUESTION #4) Are there other complications around CGT with these examples that I haven’t considered here?
I should add that we realise that income tax would be payable.
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