What does the six-year rule address?
The ATO explains that an eligible former home may continue to be treated as a main residence for a period after the owner moves out. Income-producing use can be covered for up to six years, subject to the applicable conditions. Ownership of another home and the choices made for it can affect the result.
Does the six-year rule automatically require a valuation?
No. The main residence choice and the home-first-used-to-produce-income rule are separate questions. A market value at the first income-producing date can be relevant where that rule applies. Ask your accountant to confirm the conditions and required date; do not assume every rental conversion or sale after six years has the same treatment.
Build a dated property history
- Purchase and occupancy dates.
- When income-producing use first began.
- Each later period of rental, private use and occupancy.
- Any other properties treated as a main residence.
- Ownership changes, improvements and sale documents.
Preparing the valuation brief
Once the tax adviser has confirmed the date, provide the valuer with photographs, floor plans and renovation records relevant to that period. Keep later improvements separate so today's condition is not mistaken for the historical condition.
A CGT valuation addresses the instructed tax purpose. Where the date is in the past, a retrospective valuation may provide the necessary market evidence. The valuer assesses value; the tax adviser determines how it is used.
Frequently asked questions
Does leaving the property vacant reset the six years?
Do not assume vacancy creates a fresh six-year entitlement. Have your adviser assess the full occupancy and income-use history against the ATO conditions.
Can a past valuation be prepared now?
A retrospective assignment may be possible if sufficient evidence is available. The report should identify its historical valuation date and current preparation date accurately.
Does the report determine my CGT exemption?
No. It supplies value evidence for the specified date; eligibility for an exemption is a separate tax question.
Sources and further reading
- ATO: Treating a former home as your main residence — Main residence choices and the relationship to first income-producing use.
- ATO: Market valuation for tax purposes — Tax valuation evidence, purpose and documentation.
Arrange the right report
Explore cgt valuations with Propti. Send the property address, purpose, required date and recipient’s instructions when you request a property report quote.