Main Residence Exemption Calculator
CGT and the 6-Year Rule

The 6-year rule, worked through

Take the example above. The home was bought for $600,000 and first rented out on 1 July 2019, when a valuer put it at $750,000. Because it was rented for longer than 6 years, the ATO treats it as bought on 1 July 2019 for $750,000: the gain is $1,050,000 less $750,000 and $20,000 of selling costs, or $280,000. The first 6 years of renting are exempt, which leaves 427 of the 2,620 days taxable: $45,633, halved to $22,816 by the discount. Selling just inside the 6 years would have made the whole gain exempt, which is why the sale contract date matters so much here.

Two choices drive the answer. First, you choose whether to use the 6-year rule at all, and while you use it you cannot treat a new home as your main residence (apart from up to 6 months when moving house). If your new home will have the bigger gain, it can be better to let the old one go. Second, renting it out is what limits the absence to 6 years: left vacant or used as a holiday home, a former home can stay your main residence indefinitely.

When the cost base resets to market value

The "home first used to produce income" rule applies when all of these are true: you bought the home on or after 20 September 1985, you first used it to produce income after 20 August 1996, it would have been fully exempt just before that, and you will get only a partial exemption when you sell. In that case the gain is worked out from the market value on the day you first rented it (or started the business), and the 12 months for the CGT discount also run from that day, which is why a former home sold within a year of first renting it gets no discount at all. The rule does not apply if the property was rented from the day you bought it, if you inherited it, or if it ends up fully exempt.

What this calculator does not cover

It works for an Australian-resident individual with one home on up to 2 hectares and one continuous absence. It does not handle more than one separate absence (each gets its own 6 years), spouses living in different homes, the 6-month overlap when moving house, inherited dwellings, building on vacant land, or the small business CGT concessions. It covers sale contracts up to 30 June 2027: from 1 July 2027 the 50% discount is replaced by cost-base indexation and a 30% minimum tax (Treasury Laws Amendment (Tax Reform No. 1) Act 2026), which the CGT calculator models. Foreign residents generally cannot claim the exemption at all; use the foreign resident CGT calculator. For an investment property that was never your home, the CGT calculator works out the full gain and tax, and the negative gearing calculator shows what renting it out costs or earns you each year before the sale.

Your home in your net worth

For most Australian owners the home is the largest asset they have, and its equity is the biggest part of their net worth. The home equity calculator shows how much of it you own outright, and average net worth by age in Australia shows how your total compares with other Australians your age. If you are keeping the old home as a rental, the rental yield calculator tells you what it returns on today's value.