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What is the CGT Six-Year Rule? The capital gains tax property six-year rule allows you to use your property investment as if it was your principal place of residence for up to six years whilst you rent it out. The Capital Gains Tax Property 6-Year Rule Duo Tax https://duotax.com.au › capital gains tax Duo Tax https://duotax.com.au › capital gains tax

A 'sub-cap' of $500,000 (unindexed) is available to eligible taxpayers who claim the CGT retirement exemption. This amount counts towards an individual's lifetime CGT cap of $1.705 million (2023/24).

Incidental acquisition costs Estate agents's commission - where there is a property sale. Legal costs. Costs of transfer - e.g. stamp duty land tax.

To limit capital gains taxes, you can invest for the long-term, use tax-advantaged retirement accounts, and offset capital gains with capital losses.

Calculate Your Capital Gains Taxes Correctly In addition to the home's original purchase price, you can deduct some closing costs, sales costs and the property's tax basis from your taxable capital gains.

CGT small business retirement exemption lifetime limit: a member cannot elect to apply a CGT small business retirement exemption to more than $500,000 during their lifetime. CGT cap: this cap limits the amount of exemptions that a member can claim through a CGT cap election during their lifetime.

Capital gains example This example uses the current capital gains inclusion rate that requires half of the capital gains to be taxed. If you sold an asset for $500,000, with a purchase price of $100,000, your capital gain is $400,000 and the taxable capital gain is $200,000.

Tax loss harvesting: In Canada, you can offset capital gains with capital losses. This reduces your overall tax burden and is known as tax loss harvesting. Lower-performing funds in a portfolio generate a capital loss that may be used to offset all or part of any realized capital gains.

Going by your list, the 6-year rule covers the first 6 years you rent your property out. After this when it's vacant for 6 months you can still treat it as your main residence because it's not being used to produce income. If you rent it out again straight after, then this period is subject to CGT.