How long does a rental property have to be your primary residence before selling it to avoid Capitol gains tax?
You will be liable for some capital gain on the property when you sell it. By living in it you do not completely remove the requirement to pay capital gains tax. A very simplified example might look like this: Property purchase September 2000 for $150,000 Property rented till Feb 2010. Approx market valuation at Feb 2010 $400,000 Main residence to Aug 2012 Sold Aug 2012 for $500,000 Now in this example, to work out the CGT you would add the costs of purchase in 2000 to the purchase price. This would include charges such as stamp duty, conveyancing etc, which might make the full purchase price $160,000. The valuation at Feb 2010 when it ceased to be a rental property is $400,000 and you deduct the selling costs incurred in 2012 (advertising, agent fees, auction fees etc). If the cost of selling comes to $20,000 then your CGT sale price is $400,000 (valuation at time of ceasing rentals) minus $20,000 costs = $380,000. To work out CGT, sell price minus purchase price is $220,000. Multiply
