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186GT(Newbie)Newbie
20 Mar 2026

Hi All,


We would like to seek confirmation in regards our case scenario as below if we can apply 6 years rules for Full CGT exemption :


Bought house A in May 2017 and move straight in to live as primary owner occupied. Bought new house B in Oct 2022 and move from house A to B and live in house B as primary owner occupied since Oct 2022. We leased out house A since Oct 2022 and thinking to sell house A in Oct 2026.


A. Are we eligible for 6 year rules and get full CGT exemption since it was our primary owner occupied from May 2017 to Oct 2022 and leased out from Oct 2022 to Oct 2026 ( less than 6 yrs ).


B. The tax agent advice we won't be eligible for full CGT exemption for this 6 yrs rules as we are now live in house B as our primary residence since Oct 2022.


C. We were told only eligible for partial CGT exemption from May 2017 to Oct 2022 period but has to pay CGT for the period from Oct 2022 to Oct 2026 for house A due to house B is our primary residence since Oct 2022. Is this correct if not please advise.


Thank you in advance.


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3 replies
145 views
3 replies

All replies

Taxduck(Taxicorn)Taxicorn
20 Mar 2026

The 6 year rule allows a home owner to move out of their home (main residence) and continue to treat that property as their main residence for a period of time. That period includes 6 years whereby the property can be rented and indefinitely if left vacant.

On facts presented this would appear to be the case here. The rule is below.

Treating former home as main residence | Australian Taxation Office

If you move into another property you own, you make a choice when you prepare your tax return for the year in which a CGT event occurs on either property, as to which property you will treat as your main residence (so CGT exempt) at any particular time. From link above

"During the time that you treat the property as your main residence after you stop living in it:

  • It continues to be exempt from CGT (the same as if you were still living in it, even if you start renting it out after you leave).
  • You can't treat any other property as your main residence (except for up to 6 months if you are moving house)."

Even though you are living in your new home, for CGT purposes you can continue to treat your old home as your main residence for that period whereby you own both properties.

Liked by 186GT
YellowPotato(Taxicorn)Taxicorn
20 Mar 2026

May be best to see a(nother) tax agent or get a private ruling for confirmation


Keyword "eligible". It does not mean the property has MRE.


Generally, MRE is applied to one eligible property on any given day, exception being the 6 month rule but doesn't apply for your scenario since you rented out the previous property. If there's overlap of eligible properties on any given day, a choice will need to be made to apply MRE to which property and whichever properties didn't applied cannot have MRE on those days. The choice can change and it's locked in by what is declared in tax return.


Assuming only ever had A and B for main residence properties. And both of you have MRE available regardless who owns what for A and B and been been a couple for tax purposes since purchase of A.

1. That seems fine

2. Both properties are eligible, your choice

3. Same answer as 2


Up to you which one is better for you

Liked by 186GT
TaxTalk1234(Dynamo)Dynamo
20 Mar 2026

You need do some modelling of whether it is better to treat property A or property B as your main residence between Oct 2022 and Oct 2026. You can use the absences provisions to fully exempt property A if you want, but it then exposes property B to CGT for that period. In doing your modelling, it is best to get a tax agent's advice as the calcs are not simple, but are very very broadly

A) cost base of property A is the market value when you first rented it out. If you elect to treat property B as your main residence for that period, the assessable gain on property A is the movement between that market value and the sales price (roughly), less 50% CGT discount (for now - who knows what the May budget will hold!!)

B) if you elect to treat property A as your main residence from Oct 2022 to sale, then keep really really good records of the cost incurred on property B - rates, insurance, interest etc... as they can be added to the purchase price and associated costs of acquiring property B for the purpose of determining your assessable gain when you sell. Model a few different scenarios there.

Liked by Boonamerrie3 and 186GT

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