Capital Gains Tax - The 6 Year Rule

Six - Year Capital Gains Tax Rule can be game-changing in your wealth-building journey.

When it comes to capital gains tax (CGT), this rule can benefit homeowners who decide to rent out their property when they upgrade or move to a new home, temporarily or permanently.


How does it work?


If you own a property that is classified as your primary residence and then you choose to rent it out, you can continue to treat is as your main residence for up to six years. During this time, you wonโ€™t be liable to pay CGT on any increase in the propertyโ€™s value.

๐—˜๐—น๐—ถ๐—ด๐—ถ๐—ฏ๐—ถ๐—น๐—ถ๐˜๐˜†: To qualify for the six-year rule, you must have initially lived in the property as your main residence.

๐—ง๐—ถ๐—บ๐—ฒ ๐—™๐—ฟ๐—ฎ๐—บ๐—ฒ: The six-year period starts from the date you moved out of the property or when it was first rented out, whichever occurred first. If you move back into the property within a six-year period, it resumes its status as your main residence.

Tax laws can be complex, and individual circumstances vary. If you are considering utilizing this CGT benefit, it is best to consult with a qualified tax professional or an accountant.

When it comes to building wealth, tax benefits play a significant role and staying informed and seeking professional advice can help you navigate your financial decisions more effectively.

TEAM SONI CAN HELP

If you are seeking a trusted partner for your property investment journey, Team SONI can help! Reach out for a no-obligation consultation today!