Six-year rule
An Australian CGT concession that allows a dwelling which was a taxpayer's main residence to continue to be treated as their main residence for up to six years while it is used to produce income.
The six-year rule is an election under section 118-145 of the Income Tax Assessment Act 1997. If a taxpayer moves out of their main residence and rents it out, they can continue to treat it as their main residence for up to six years for CGT purposes, meaning no capital gain arises on sale within that window.
Only one dwelling at a time can be the main residence, so a taxpayer who buys a new home while claiming the six-year rule on their former home must generally choose which property will carry the exemption for any overlapping period.
If the taxpayer moves back in before the six years are up, the six-year clock resets — they can move out and rent the property again and start a new six-year period.
Primary source
Australian Taxation Office (ATO) — Treating a former home as your main residence →Last reviewed 15 April 2026. Rates, thresholds, and deadlines change — always verify against the primary source before making decisions.