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Shan(Newbie)Newbie
19 Feb 2026

Hi There

My current investment property was built in June 2014 and we lived there till March 2020 and started renting till now.

I moved to upgraded property in 2020 and lived there till 2024 and sold it in 2024.

Now I am planning to sell the investment property which was built in 2014. This was rented for about 6 years now. I got a valuation at the time of the first renting and it was $760k and now I can sell the house for $980k. Could you please advise how should I calculate the CGT for this property. My understanding is to find the portion of the rental period by diving the total time of the ownership which is about 45%. so the taxable portion of CGT is $99,00 (220,000 x 45%) and then apply 50% CGT discount so my total captal gain tax is $49,500 to be added to my income


Please advise

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168 views
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TaxTalk1234(Dynamo)Dynamo
19 Feb 2026

Assuming you treated the second property as your main residence for tax purposes between 2020 and 2024 and have since purchased another property that you will be treating as your main residence, then as you have indicated, the property is subject to CGT from when you moved into your new home until sale. If this is not the case, then there may be some periods you can treat the IP as your main residence under the 6 year absence provisions, but this assumes that's not the case.


And you are correct that you reset your cost base to market value at the time you first start using it for income producing purposes (so the $760k), however your calculation double-dips as you don't then apportion for the time before 2020 it was your main residence as well. Resetting the cost base to market value in 2020 effectively ensures that only the gain attributable to the period it was not your main residence is taxed. So it would be $220k, with 50% CGT discount (assuming you are a tax resident) added to your assessable income and taxed at your marginal tax rate.


When selling investment properties, some people make tax deductible super contributions in the year of sale to reduce their taxable income - you may want to consider whether that is worthwhile for you given the quantum of the gain.

NikkiATO(Community Moderator)Community Moderator
20 Feb 2026

Hi @Shan,


Your understanding of the calculation is on the right track, but there's an important adjustment you need to make when working out your capital gains tax (CGT).


When your home becomes a rental property, you're generally taken to have acquired it at the market value when you first used it to produce income. Since you got a valuation of $760,000 when you started renting in March 2020, this becomes your cost base for the CGT calculation – not the original purchase price from 2014.


You'll need to include your net capital gain in your assessable income for the year you sell the property. The gain is added to your other income and taxed at your marginal tax rate.


Use our Capital gains tax property exemption tool to help you work out what percentage of your capital gain is exempt from CGT based on your exact ownership dates and usage periods.

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