Selling your home? The main residence exemption and 6-year rule
Your home is usually free of capital gains tax (CGT) when you sell it. But renting it out, running a business from it, moving out or moving overseas can change that. Here is a simple guide.
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The basic rule
If a property was your home for the whole time you owned it, and you were an Australian resident when you sold it, any gain is usually not taxed.
The 6-year rule
If you move out and rent your home out, you can usually keep treating it as your main residence for up to 6 years at a time, as long as you do not treat another property as your main residence in that period. If you move back in, the 6-year period can start again next time you move out.
- If it is not rented out, there is no time limit on this choice
- You can only have one main residence at a time (with a short overlap when moving)
- You make the choice when you lodge your tax return for the year you sell
When only part is exempt
🏠 Rented longer than 6 years
The time after 6 years can be taxable.
💼 Used for business
Part of the gain can be taxable if part of the home was used to earn income.
🏗️ Rented first, lived in later
Special rules can apply to the value when it first became income-producing.
🌳 Land over 2 hectares
The exemption is limited to the home and up to 2 hectares of land.
Moving overseas?
If you are a foreign resident when you sell, you generally cannot use the main residence exemption at all, even for the years you lived there – unless a limited life event exception applies. Plan before you sell.
2027 change: From 1 July 2027 the 50% CGT discount is replaced for gains made after that date (gains made before then keep the discount). This can change the tax on any part of a property that is taxable. Ask us how it affects you.
⚠️ General information only – not tax or legal advice. The main residence rules have many conditions and exceptions, and the CGT rules change from 1 July 2027. This page is a simple overview as at November 2026 and does not consider your personal circumstances. Laws, rates and thresholds change, and outcomes are decided by the tax office or the courts – UV TAX cannot guarantee any result. Please get advice for your situation before acting.
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0466 268 405Frequently asked questions
Do I pay CGT when I sell my home?
Usually not, if it was your main residence the whole time you owned it and you are an Australian resident when you sell.
What is the 6-year rule?
If you move out and rent your home out, you can usually keep treating it as your main residence for up to 6 years at a time.
Can I have two main residences?
Generally no, except for a short overlap of up to 6 months when moving from one home to another.
What if I am living overseas when I sell?
Foreign residents generally cannot use the main residence exemption, except in limited life event situations. Get advice before you sell.
Does the 2027 CGT change affect my home?
A home that is fully exempt stays exempt. But if part of the gain is taxable, the change to the 50% discount from 1 July 2027 can affect the tax.
Related
General information current as at November 2026.