CGT 6 Year Rule Calculator AU (Main Residence)

What this calculator works out

The "6-year rule" — formally the absence rule in section 118-145 of the Income Tax Assessment Act 1997 — lets you keep treating a former home as your CGT-exempt main residence for up to 6 years per absence period when the home is rented out, and indefinitely when it is not income-producing. It is one of the most generous concessions in the Australian tax system, but also one of the most misunderstood.

This calculator estimates the day-count apportionment of any capital gain when the absence rule applies, applies the 50% CGT discount under Division 115 where eligible, and surfaces the assumptions so a registered tax agent can review them. It is a general estimate — main residence calculations have many edge cases (the first-use rule, spouse main-residence rule, partial use for business, ATO PCGs) and you should always confirm a specific position before lodging your return.

The formula and where the rates come from

totalGain          = capitalProceeds − costBase            // s 110-25 ITAA 1997
ownershipDays      = saleContractDate − acquisitionContractDate

// For each absence period:
//   if rentedOut: coveredDays = min(absenceDays, 2,191)   // 6 × 365.25 ≈ 2,191
//                 overCapDays = max(0, absenceDays − 2,191)
//   else:         coveredDays = absenceDays               // indefinite
//                 overCapDays = 0
nonMainResidenceDays = sum(overCapDays across absences)
mainResidenceDays    = ownershipDays − nonMainResidenceDays

assessableGain      = totalGain × (nonMainResidenceDays ÷ ownershipDays)

// Division 115 — 50% discount for individuals/trusts holding ≥ 12 months:
if heldDays ≥ 365:
   taxableGain = assessableGain × 0.50
else:
   taxableGain = assessableGain

The 6-year cap and apportionment formula are in ATO — Treating a former home as your main residence and are derived from sections 118-145 to 118-192 of the Income Tax Assessment Act 1997. The 50% CGT discount is in Division 115 of the same Act.

How to read the inputs

• Acquisition / sale dates — use the contract dates, not settlement dates. The CGT event happens on the contract date (s 104-10).
• Cost base — purchase price plus acquisition costs (stamp duty, conveyancing, search fees) plus the cost of any capital improvements. Major repairs are different from improvements and may not be included; check the ATO guidance.
• Capital proceeds — sale price minus selling costs (agent commission, legal fees, marketing).
• Moved in immediately — if you did not move in straight after settlement, the first-use rule in s 118-192 may reset your cost base to the market value at first income use. The calculator flags this — get specific advice.
• Pre-CGT — assets acquired before 20 September 1985 are CGT-exempt. The output zeroes when this is ticked.
• Absence periods — add each move-out / return cycle. Tick "rented out" if the home produced assessable income (this triggers the 6-year cap). Untick if the home was vacant or used by family rent-free (indefinite coverage).

Worked examples

1. Always your main residence. Bought 2010 for $400,000, lived in it the whole time, sold 2025 for $900,000. Total gain $500,000, but main residence exemption covers it: $0 taxable gain.

2. Single 5-year rented absence (under cap). Bought 2010 for $400,000, lived 2010-2015, rented 2015-2020 (5 years), moved back, sold 2025 for $900,000. The 5 years are under the 6-year cap → $0 taxable gain.

3. Single 8-year rented absence (over cap). Bought 2015 for $500,000, lived 2015-2017, rented 2017-2025 (8 years), sold 2025 for $900,000. Total gain $400,000. Over-cap days ≈ 731 / 3,653 ownership days ≈ 20%. Assessable ≈ $80,000. After 50% discount: ≈ $40,000 taxable gain.

4. Two short rented absences with reset. Bought 2005 for $400,000, sold 2026 for $1,200,000. Two separate 5-year rented absences (2010-2015 and 2016-2021) with a 1-year return in between. Each absence is under the 6-year cap → $0 taxable gain. The clock resets between absences.

5. Vacant absence (no income). Same property as Example 3 but the house was kept vacant during the 8-year absence (no tenants, no Airbnb). The cap does not apply → $0 taxable gain. This is why some retirees on extended overseas trips choose to leave the home empty.

6. First-use rule (rented before living in). Bought 2010 for $400,000, rented straight away until 2014, then moved in and sold 2024 for $900,000. The first-use rule (s 118-192) resets the cost base to market value at first income use (i.e. 2014) — the calculator flags this and you should confirm the new cost base with a tax agent before relying on the day-count result.

7. Spouse rule clash. A couple owns home A and home B. Each nominates their own home as main residence. Under s 118-170 only one main residence is allowed at a time — the exemption is split 50/50 across both homes for the overlapping period. This is a complex case that should be reviewed by a tax agent.

Common pitfalls

• The 6-year cap is per absence period, not lifetime. Two separate 5-year rented absences with a return in between are both fully covered.
• The cap only applies when rented out. If the home is genuinely vacant or used rent-free, the absence is indefinite. This is the most under-claimed concession.
• You must make the choice each year. The absence rule is a choice declared in your tax return for the year a CGT event occurs. The choice is irrevocable for the period it covers.
• Only one main residence per couple at a time. The s 118-170 spouse rule trips up many couples who own properties separately.
• Contract dates, not settlement dates. Use the date you signed the contract, not when keys changed hands.
• First-use rule resets the cost base. If the home was rented before you ever lived in it, market value at first income use replaces the original cost base — often a much higher number.
• Selling costs reduce capital proceeds, not cost base. Make sure agent commissions and legal fees are entered correctly.
• The 50% discount only applies to individuals, trusts and complying super funds, and only if held at least 12 months. Companies do not get it.
• Foreign residents lost the main residence exemption from 30 June 2020 (with grandfathering). If you are a foreign resident at the date of sale, this calculator may overstate the exemption — get advice.

Related calculators

• 50% CGT Discount Calculator (AU) — apply the 50% discount to any CGT event.
• Crypto CGT Calculator (AU) — equivalent CGT logic for cryptocurrency.
• Property Depreciation Calculator (AU) — Division 40/43 deductions for the rental period.
• Negative Gearing Calculator (AU) — interest deductions during the rental period.
• Stamp Duty Calculator NSW — how stamp duty feeds into the cost base.

Sources:

• ATO — Treating a former home as your main residence (the 6-year rule)
• ATO — Your main residence (home)
• ATO — CGT discount
• Income Tax Assessment Act 1997 — s 118-145 (absence rule)
• ATO — Foreign residents and main residence exemption