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Real Estate Insight

Capital gains tax

The 6-year rule: CGT on renting out your home

Moved out and rented your home? Enter how you used it over the years. You'll see how many days are taxable, whether the cost base resets to the value when you first rented it, and the tax when you sell.

By the Real Estate Insight team · Last reviewed 6 October 2026 · How we check our numbers

How you used it

Start with the day you settled, then add a row each time the use changed.

Buying and selling
$

Price, stamp duty, legal costs and improvements.

$
$

Because it was your home until then, the gain is measured from this value. A valuation for that date is worth getting.

$

A valuation, or Treasury's formula, which we use until you enter one.

You, in the year you sell
$
% a year

Sold 30 Jun 2030

$28,927 to $32,582

36.3% of the gain is taxable (1,246 of 3,437 days). The range is because the law doesn't yet say how the exemption is shared either side of 1 July 2027.

Days that count

Ownership period (from first rented)3,437 days
Lived there0
Away, covered by the absence rule2,191
Taxable days1,246 (3.4 years)

It was your home for every day until you first rented it out, so the "home first used to produce income" rule applies: you're treated as buying it on 1 February 2021 for its market value (estimated here), and only days from then count.

Two ways the split could work

The gain is split at 30 June 2027 (Treasury formula value): the part before keeps the 50% discount, the part after is indexed by 1.077.

Each part, its own daysOne fraction for both
Taxable share before / after6% / 100%36% / 36%
Deferred gain (before discount)$18,088$102,338
Gain after July 2027$80,781$29,285
Tax$32,582$28,927

Under the old 50% discount the same sale would cost $29,126.

About this estimate. General information, not tax advice. One Australian resident owning the whole home, with no part used for business and no other home treated as the main residence while away. Days are counted from the day you settled to the day you sell. Foreign residents get no main residence exemption. Real Estate Insight is not a registered tax agent: check your situation with one.

How the exemption is worked out

  1. Days you lived there are exempt.
  2. Days away are exempt under the absence rule if you choose it: up to six years for each absence while it's rented, without limit while it's empty.
  3. Everything else is taxable. The taxable share of the gain is taxable days divided by days owned.
  4. The reset. If it was your home every day until you first rented it out, you're treated as buying it then at market value, and only days from then count.

Days you rented it before you first moved in can't be covered: the absence rule only starts once it has been your home.

After 1 July 2027

The taxable part of the gain is taxed under the new rules. For a home bought after 30 June 2027 the order is set out in the Explanatory Memorandum: index the cost base for inflation, then apply the main residence exemption to what's left. For a home owned across 1 July 2027, the gain is split at that date, and how the exemption is divided between the two parts is still an open question. We show both readings rather than guess. When the ATO publishes guidance, we'll update the calculator and note it in the changelog.

Questions people ask

What is the 6-year rule?
If you move out of your home and rent it out, you can keep treating it as your main residence for up to six years for that absence (section 118-145). Sell within the six years and there's no CGT. If you move back in, a new six years starts the next time you move out. While it's empty and not earning income, there's no time limit. You can't treat another home as your main residence for the same time, except for an overlap of up to six months when you're moving.
What if I rent it out for more than six years?
Only the days after the six years are taxable. The taxable share of the gain is those days divided by the days you owned it. And if it was your home every day until you first rented it, the clock and the cost base reset to its market value on the day it was first rented (section 118-192), so the gain is measured from then.
Do I need a valuation when I move out?
It helps. If the reset rule applies, your gain is measured from the home's market value when you first rented it out, and a valuation for that date is the best evidence. It can be done later for the right date.
Does the 2026 tax reform change the 6-year rule?
No. Neither the Tax Reform No. 1 Act nor the No. 2 Act changes the main residence rules. What changes is how the taxable part of a gain is taxed after 1 July 2027: indexation and the 30% minimum tax instead of the 50% discount, with gains before then keeping the discount.
How is the gain split at 30 June 2027 when the home was only partly my main residence?
That isn't settled. The Act treats the home as sold and bought back at 1 July 2027, and it counts main residence days separately before and after that date when it sorts gains into categories, but it doesn't say how the exemption itself is shared between the two parts. The ATO hasn't issued guidance. The calculator shows both readings and the range between them.
Can I negatively gear my old home once I rent it out?
If you bought it before 7:30pm AEST on 12 May 2026, yes: it keeps negative gearing when you rent it out (section 26-155(3AA)). If you bought it after Budget night and it's an established home, losses from renting it are quarantined from 1 July 2027.
Do foreign residents get the main residence exemption?
Generally no. Since 2020, someone who is a foreign resident for tax when they sell can't claim it, apart from limited life events exceptions.

Sources